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Question
Which of the following is a disadvantage of franchising as a mode of entry into foreign markets?
A. The franchiser has to bear development costs and risks associated with foreign expansion.
B. While franchising offers an ideal entry mode for manufacturing firms, it often leads to undesirable results for service firms.
C. Poor quality standards of a foreign franchisee can cause a decline in the franchising firm's worldwide reputation.
D. The franchiser has no incentive to sustain a long-term interest in the foreign country.
E. Franchising often forces a franchiser to take out profits from one country to support competitive attacks in another.
Answer
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