Franchising, a mode of entry into a foreign market, helps firms exert

QUESTION

Franchising, a mode of entry into a foreign market, helps firms exert greater quality control over franchises in foreign locations.

Indicate whether the statement is true or false.

ANSWER

FALSE
A significant disadvantage of franchising is quality control. Foreign franchisees may not be as concerned about quality as they are supposed to be, and the result of poor quality can extend beyond lost sales in a particular foreign market to a decline in the firm’s worldwide reputation