A significant problem with identifying risk and failure in new venture formation is the lack of a clear definition of what constitutes a failure. A later chapter deals with the specifics of failure and what is required to offset them. The process of developing or creating a new concept and then exploiting it is also hazy. Is the idea of building a new restaurant in a “new” suburb really a new Type I concept? Or does it fall into a classification where astute management decision making, rather han entrepreneurship, is required? In the former case the fact of being a knowledgeable professional would satisfy the conditions for success. In this context the individual acts on the basis of established evaluations of established factors and applies himself accordingly. The traditional franchising operation works in this fashion and is a Type III entrepreneurial activity.