Question 1

Level Fencing Company wants to present information in "disclosure documents" via the Internet to prospective franchisees. Among other legal requirements with which Level Fencing must comply, prospective franchisees must​

Accepted Answer

A)   ​agree to settle any lawsuits that may arise over the documents.
B)   ​be able to download or save all electronic documents.
C)   ​provide e-mail addresses for Level Fencing to verify users' authenticity.
D)   ​register with the Federal Trade Commission via Level Fencing's Web site.E) A) and B)
F) None of the above

Question 2

Digital Wizards, Inc., a franchisor of computer technicians, wishes to standardize the pricing practices of its franchisees because they have engaged in price-cutting to increase their respective shares of the market. The most prudent action might be for Digital Wizardsto

Accepted Answer

A)   ​mandate the prices at which its franchisees sell their services.
B)   ​suggest the prices at which its franchisees sell their services.
C)   ​require its franchisees to pay a premium based on any increase in their market share.
D)   ​threaten its franchisees with a suit for material breach of contract.E) B) and D)
F) All of the above

Question 3

Bill sells Corner Deli & Groceries, a sole proprietorship, to Diane. This is​

Accepted Answer

A)   ​a franchise.
B)   ​not a transfer of ownership without the approval of the other owners of the business.
C)   ​not a transfer of ownership because a sole proprietorship cannot be transferred.
D)   ​a transfer of the ownership of the business.E) None of the above
F) B) and D)

Question 4

State deceptive trade practices acts do not apply to actions by franchisors.

Accepted Answer

A) True 
 B)False

Question 5

Without creating a separate business organization, Reynold starts up, and assumes the financial risk of, Sole Savers, a new, pre-owned auto sales enterprise. Reynold is​

Accepted Answer

A)   ​a franchisee.
B)   ​a franchisor.
C)   ​a partner.
D)   ​a sole proprietor.E) A) and B)
F) B) and D)

Question 6

In a manufacturing arrangement, a franchisor transmits to a franchisee the essential ingredients or formula to make a particular product. ​

Accepted Answer

A) True 
 B)False

Question 7

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her​

Accepted Answer

A)   ​annual sales or volume of business.
B)   ​weekly payroll expense.
C)   ​monthly overhead savings.
D)   ​income from unrelated business activities.E) A) and B)
F) All of the above

Question 8

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

Accepted Answer

A)   ​a franchisee.
B)   ​a franchisor.
C)   ​a partner.
D)   ​a principal.E) B) and C)
F) A) and D)

Question 9

The franchise agreement is not likely to set out standards for the franchise to meet.

Accepted Answer

A) True 
 B)False

Question 10

The duration of a franchise is a matter determined by federal or state statutes.

Accepted Answer

A) True 
 B)False

Question 11

Kari owns and operates Living Earth Garden Shop, an outdoor tool and landscaping supplies retail store, as a sole proprietorship. When Kari dies, Living Earth will automatically​

Accepted Answer

A)   ​cease to continue.
B)   ​pass to the state.
C)   ​be offered for sale to its creditors and competitors.D) A) and B)
E) A) and C)

Question 12

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by​

Accepted Answer

A)   ​contract law.
B)   ​no law.
C)   ​the Franchise Disclosure Document, or FDD.
D)   ​Article 2 of the Uniform Commercial Code.E) A) and B)
F) A) and C)

Exam 26: Sole Proprietorships and Private Franchises

The franchise agreement is not likely to set out standards for the franchise to meet.

Correct Answer
verified

Level Fencing Company wants to present information in "disclosure documents" via the Internet to prospective franchisees. Among other legal requirements with which Level Fencing must comply, prospective franchisees must

Correct Answer
verified

Bill sells Corner Deli & Groceries, a sole proprietorship, to Diane. This is

Correct Answer
verified

In a manufacturing arrangement, a franchisor transmits to a franchisee the essential ingredients or formula to make a particular product.

Correct Answer
verified

State deceptive trade practices acts do not apply to actions by franchisors.

Correct Answer
verified

Digital Wizards, Inc., a franchisor of computer technicians, wishes to standardize the pricing practices of its franchisees because they have engaged in price-cutting to increase their respective shares of the market. The most prudent action might be for Digital Wizardsto

Correct Answer
verified

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by

Correct Answer
verified

Without creating a separate business organization, Reynold starts up, and assumes the financial risk of, Sole Savers, a new, pre-owned auto sales enterprise. Reynold is

Correct Answer
verified

Kari owns and operates Living Earth Garden Shop, an outdoor tool and landscaping supplies retail store, as a sole proprietorship. When Kari dies, Living Earth will automatically

Correct Answer
verified

The duration of a franchise is a matter determined by federal or state statutes.

Correct Answer
verified

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her

Correct Answer
verified

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

Correct Answer
verified

Exam 26: Sole Proprietorships and Private Franchises

The franchise agreement is not likely to set out standards for the franchise to meet.

Correct AnswerverifiedShow Answer

Level Fencing Company wants to present information in "disclosure documents" via the Internet to prospective franchisees. Among other legal requirements with which Level Fencing must comply, prospective franchisees must​

Correct AnswerverifiedShow Answer

Bill sells Corner Deli & Groceries, a sole proprietorship, to Diane. This is​

Correct AnswerverifiedShow Answer

In a manufacturing arrangement, a franchisor transmits to a franchisee the essential ingredients or formula to make a particular product. ​

Correct AnswerverifiedShow Answer

State deceptive trade practices acts do not apply to actions by franchisors.

Correct AnswerverifiedShow Answer

Digital Wizards, Inc., a franchisor of computer technicians, wishes to standardize the pricing practices of its franchisees because they have engaged in price-cutting to increase their respective shares of the market. The most prudent action might be for Digital Wizardsto

Correct AnswerverifiedShow Answer

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by​

Correct AnswerverifiedShow Answer

Without creating a separate business organization, Reynold starts up, and assumes the financial risk of, Sole Savers, a new, pre-owned auto sales enterprise. Reynold is​

Correct AnswerverifiedShow Answer

Kari owns and operates Living Earth Garden Shop, an outdoor tool and landscaping supplies retail store, as a sole proprietorship. When Kari dies, Living Earth will automatically​

Correct AnswerverifiedShow Answer

The duration of a franchise is a matter determined by federal or state statutes.

Correct AnswerverifiedShow Answer

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Level Fencing Company wants to present information in "disclosure documents" via the Internet to prospective franchisees. Among other legal requirements with which Level Fencing must comply, prospective franchisees must

Correct Answer
verified

Bill sells Corner Deli & Groceries, a sole proprietorship, to Diane. This is

Correct Answer
verified

In a manufacturing arrangement, a franchisor transmits to a franchisee the essential ingredients or formula to make a particular product.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by

Correct Answer
verified

Without creating a separate business organization, Reynold starts up, and assumes the financial risk of, Sole Savers, a new, pre-owned auto sales enterprise. Reynold is

Correct Answer
verified

Kari owns and operates Living Earth Garden Shop, an outdoor tool and landscaping supplies retail store, as a sole proprietorship. When Kari dies, Living Earth will automatically

Correct Answer
verified

Correct Answer
verified

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her

Correct Answer
verified

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

Correct Answer
verified