Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

In a franchise agreement, what is typically the franchiser responsible for?

1. Providing initial training and support.

2. Paying all operational costs of the franchise.

3. Managing daily operations of the franchise.

4. Picking a location for the franchise.

The correct answer is: Providing initial training and support.

A franchise agreement establishes a partnership where the franchiser provides various forms of support to the franchisee. One key aspect of this relationship is the initial training and support that the franchiser offers to ensure that the franchisee understands how to operate the business according to the franchise's standards and protocols. This training can include information on the product or service, branding guidelines, marketing strategies, and operational procedures that align with the overall franchise system. By offering this support, the franchiser helps the franchisee start the business effectively and increases the likelihood of success, which benefits both parties. The franchiser's ongoing support may also include advertising, assistance in site selection, and business advice, but the foundational training typically occurs at the outset of the franchise relationship. The other options do not accurately reflect the franchiser's typical responsibilities in a franchise agreement. For instance, while the franchiser might assist in selecting a location or provide guidance, they generally do not manage the daily operations or pay all operational costs, as those responsibilities usually fall on the franchisee. This delineation of responsibilities is crucial for maintaining the franchise's operational structure and ensuring that each party understands their roles.