Who absorbs a hotel's operating losses when it is affiliated with a national brand?
A) The hotel's managers
B) The brand's managers
C) The owners of the hotel
D) The owners of the brand
The purpose of an area of protection clause in a franchise agreement is to
A) limit the total number of hotels sold in a defined geographic area.
B) expand the total number of hotels sold in a defined geographic area.
C) limit the number of a specific brand of hotels in a defined geographic area.
D) expand the number of a specific brand of hotels in a defined geographic area.
The purpose of liquidation fees identified in a franchise agreement is to compensate the
A) franchisor for early exit by the franchisee.
B) franchisee for early exit by the franchisor.
C) franchisor for an agreement extension requested by the franchisee.
D) franchisee for an agreement extension requested by the franchisor.
A management company has secured a contract to operate a branded hotel. Who will typically employ the hotel's GM in this situation?
A) The hotel owner
B) The brand managers
C) The hotel's franchisor
D) The management company
Two primary advantages a hotel gains by affiliating with a franchised brand are name recognition and
A) reduced per occupied room labor costs.
B) lower levels of commissions paid to OTAs.
C) connection to the brand's reservation system.
D) the ability to employ temporary workers when volume fluctuations greatly.
Who is responsible for verifying the accuracy of information presented in a Franchise Disclosure Document (FDD)?
A) A Federal governmental agency
B) The person or company reading the FDD
C) The person or company preparing the FDD
D) A governmental agency operating in the state in which the FDD was filed
The hotel occupancy tax is also know in the hotel industry as the
A) inn tax.
B) bed tax.
C) sleep tax.
D) pillow tax.
A franchised hotel generates 2,000,000 per year in gross rooms revenue. What amount of franchise fees is this hotel likely to be required to pay its franchisor on this level of rooms revenue?
A) Less than 60,000
B) 60,000 to 300,000
C) 300,001 to 500,000
D) Over 500,000
The purpose of a window in a franchise agreement is to give franchisors and franchisees the right to
A) early extension of their agreements.
B) early termination of their agreements.
C) renegotiate the area of protection called for in the agreements.
D) renegotiate the franchise fees that must be paid during the life of the agreements.
Which governmental agency in the U.S. regulates the actions of franchisors?
A) Department of the Treasury
B) Federal Trade Commission (FTC)
C) Small Business Administration (SBA)
D) Consumer Financial Protection Bureau
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