Business Studies Multiple Choice Question – 10 August 2021

Fast food chain McDonald’s consistently reaches number one in the Top 100 Global Franchise Rankings. 

Which one of the following is an advantage of buying a McDonald’s franchise?

Select ONE answer:

1. Using an established brand name
2. Making all your own decisions
3. Finding your own suppliers
4. Keeping all the profits

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – is wrong because employees are more empowered as flexible eCorrect – Definition of a franchise: e.g. A way of running a business that allows an individual or business to pay for the right to use another firm’s branding, product knowledge and systems for a prescribed period of time. McDonald’s is a global fast food chain and recognised by consumers everywhere and symbolised. Which means buyers of McDonald’s franchises will find it easier and much less risky to build a fast food business rather than starting with an unknown and new business name.
2. Not correct – franchisees cannot make all the decisions because some decisions are made by the franchisor .
3. Not correct – the franchisor controls the suppliers.
4. Not correct – the franchisee will be required to pay a share of profits to the franchisor.

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