Question

which of the following explains why syndicate units charge higher prices and make higher sales than franchised units?

a. government regulation

b. different chains operating in markets in different characteristics

c. syndication deal is the most suitable way to operate business

d. some chains may have lower quality than others

e. any of these reasons

Answer 1

C) syndication deal is the most suitable way to operate businessis

These are like cartel or oligopoly , which decide price and supply of Goods at its own without government regulations or less regulations.

1) a temporary alliance of businesses or companies or corporation of same interest comes together to manage a large transaction Or business operation, that is difficult, or impossible, to effect individually.

3) its easy for companies to manage Or share risk ,pool their resources .

4) These can work in different fileds

such as underwriting syndicates, banking syndicates, and insurance syndicates, oil syndicates like opec.

Syndicates are free from government regulations or less government regulations.

Different chain operate in the market but of same characteristics. All chain have higher quality than others.

Franchise have higher risk as risk taking capabilities are lower and lack of diversification in managment ,operations etc as compare to syndicates.