O-LevelCommerceBusiness enterprise7100/11 · Oct/Nov 2012 · Q371 Mark

A well-known bakery sells its products through a nationwide chain of franchises. How does the franchisor benefit from this arrangement?

AThe franchised premises are regularly inspected.

BThe franchisor is responsible for managing the outlets.

CThe franchisor receives royalty payments from the franchisee.

DThe franchisor supplies training and marketing for the franchisee.

✓ Correct answer

C: The franchisor receives royalty payments from the franchisee.

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Topic: Business enterprise, O-Level Commerce (syllabus 7100). Multiple choice, 1 mark.
Source: O-Level Commerce, Oct/Nov 2012 Paper 1 Variant 1, question 37.

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