Question 1

Mucho Tacos Inc. sells franchises. Mucho Tacos imposes on its franchisees standards of operation and personnel training methods. What is the potential pitfall to Mucho Tacos if it exercises too much control over its franchisees?

Accepted Answer

A provision in a franchise agreement per...

Question 2

Ling owns and operates Metro Delivery Service as a sole proprietorship. When she dies, the business will automatically

Accepted Answer

A)  dissolve.
B)  transfer to Ling's heirs.
C)  reform with its employees as the owners.
D)  transfer to its creditors.E) B) and D)
F) B) and C)

Question 3

After notice of termination, a franchisee must be given a reasonable time to wind up the business.

Accepted Answer

A) True 
 B)False

Question 4

A franchisor can mandate retail prices for the goods that a franchisee sells.

Accepted Answer

A) True 
 B)False

Question 5

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Accepted Answer

A) True 
 B)False

Question 6

To maintain the quality of a product or service, a franchisor can exercise any degree of control over a franchisee's operation without risking potential liability.

Accepted Answer

A) True 
 B)False

Question 7

Made in the USA Clothing Inc. gives notice to Neely that it is terminating their franchise arrangement. Winding up the business requires

Accepted Answer

A)  a new franchise agreement.
B)  nothing more than closing immediately.
C)  Neely's death, disability, or insolvency.
D)  the return of the franchisor's property.E) A) and C)
F) C) and D)

Question 8

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Accepted Answer

A)  borrowing funds.
B)  bringing in partners.
C)  issuing stock.
D)  selling the business.E) A) and B)
F) All of the above

Question 9

Because each type of franchise relationship is similar, franchise contracts tend to be similar.

Accepted Answer

A) True 
 B)False

Question 10

State regulation of franchising is often aimed at protecting franchisees from unfair practices.

Accepted Answer

A) True 
 B)False

Question 11

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Accepted Answer

A)  a franchisee.
B)  a franchisor.
C)  a partner.
D)  a principal.E) None of the above
F) All of the above

Question 12

Owen plans to open Owen's Pets, a pet sales and supplies outlet, and to hire Quimby and Ruth. Owen will invest only his own money. He does not expect to make any profit for at least two years and to make almost no profit for the first three years, but he hopes to expand eventually. Which form of business organization would be most appropriate? What are the chief characteristics, advantages, and disadvantages of this form of business organization? If Owen wants to obtain additional capital to expand the business, but does not want to lose control of the firm, what is his best option?

Accepted Answer

When a business is relatively small and ...

Exam 34: Small Businesses and Franchapterises

Ling owns and operates Metro Delivery Service as a sole proprietorship. When she dies, the business will automatically

Correct Answer
verified

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Correct Answer
verified

Mucho Tacos Inc. sells franchises. Mucho Tacos imposes on its franchisees standards of operation and personnel training methods. What is the potential pitfall to Mucho Tacos if it exercises too much control over its franchisees?

Correct Answer
verified
A provision in a franchise agreement per...
View Answer

Correct Answer
verified
When a business is relatively small and ...
View Answer

After notice of termination, a franchisee must be given a reasonable time to wind up the business.

Correct Answer
verified

To maintain the quality of a product or service, a franchisor can exercise any degree of control over a franchisee's operation without risking potential liability.

Correct Answer
verified

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Correct Answer
verified

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Correct Answer
verified

A franchisor can mandate retail prices for the goods that a franchisee sells.

Correct Answer
verified

Made in the USA Clothing Inc. gives notice to Neely that it is terminating their franchise arrangement. Winding up the business requires

Correct Answer
verified

Because each type of franchise relationship is similar, franchise contracts tend to be similar.

Correct Answer
verified

State regulation of franchising is often aimed at protecting franchisees from unfair practices.

Correct Answer
verified

Exam 34: Small Businesses and Franchapterises

Ling owns and operates Metro Delivery Service as a sole proprietorship. When she dies, the business will automatically

Correct AnswerverifiedShow Answer

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Correct AnswerverifiedShow Answer

Mucho Tacos Inc. sells franchises. Mucho Tacos imposes on its franchisees standards of operation and personnel training methods. What is the potential pitfall to Mucho Tacos if it exercises too much control over its franchisees?

Correct AnswerverifiedA provision in a franchise agreement per...View AnswerShow Answer

Correct AnswerverifiedWhen a business is relatively small and ...View AnswerShow Answer

After notice of termination, a franchisee must be given a reasonable time to wind up the business.

Correct AnswerverifiedShow Answer

To maintain the quality of a product or service, a franchisor can exercise any degree of control over a franchisee's operation without risking potential liability.

Correct AnswerverifiedShow Answer

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Correct AnswerverifiedShow Answer

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Correct AnswerverifiedShow Answer

A franchisor can mandate retail prices for the goods that a franchisee sells.

Correct AnswerverifiedShow Answer

Made in the USA Clothing Inc. gives notice to Neely that it is terminating their franchise arrangement. Winding up the business requires

Correct AnswerverifiedShow Answer

Because each type of franchise relationship is similar, franchise contracts tend to be similar.

Correct AnswerverifiedShow Answer

State regulation of franchising is often aimed at protecting franchisees from unfair practices.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A provision in a franchise agreement per...
View Answer

Correct Answer
verified
When a business is relatively small and ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified