O-LevelCommerceBusiness enterprise7100/12 · May/June 2020 · Q361 Mark

The picture shows a customer asking for a bank loan to start a new business. Why will the bank manager be more willing to lend if the business is operated as a franchise?

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AFranchise businesses come with ready-made business plans.

BFranchise businesses have a higher survival rate than sole traders.

CFranchisees are seen as being more skilled at business.

DFranchisors pay some of the initial start-up costs.

✓ Correct answer

B: Franchise businesses have a higher survival rate than sole traders.

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Topic: Business enterprise, O-Level Commerce (syllabus 7100). Multiple choice, 1 mark.
Source: O-Level Commerce, May/June 2020 Paper 1 Variant 2, question 36.

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