Exam 31: Franchise and Special Forms of Business

Explain the circumstances that make a franchisor liable for the negligence of a franchisee.

Compare and contrast the liabilities of a franchisor and a franchisee to a franchise agreement.Provide an example.

Most franchise agreements permit a franchisor to terminate the franchise ________.

Are franchise agreements inclusive of counteroffers or additional terms to a contract?

The party who receives a license is known as the ________.

In a chain-style franchise,the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory.

When does an apparent agency arise from a franchisee agreement? Does such a situation automatically transfer liability to the franchiser?

The FTC requires the registration of the disclosure document with the Federal Trade Commission prior to its use.

Which of the following is true of the liabilities of a franchisor and a franchisee?

A franchisor discloses a cautionary statement that reads,"Caution: These figures are only estimates of what we think you may earn.There is no assurance you'll do as well.If you rely upon our figures,you must accept the risk of not doing so well." This is an instance of ________.

The Ross's Choice Corporation franchises independently owned restaurant franchises to make and sell burgers and pizzas to the public under the Ross's brand name.This is a form of a(n)________ franchise.

The ________ is a uniform disclosure document that requires a franchisor to make specific presale disclosures to prospective franchisees.

An initial license fee is a lump-sum payment for the privilege of being granted a franchise.

Which of the following is imposed upon a franchisor that violates the FTC franchise disclosure rule?

An area franchisee is also called a subfranchisor.

In an area franchise,the franchisor manufactures a product and licenses a retail dealer to distribute a product to the public.

Compare and contrast licensing and joint ventures as two forms of business arrangements.

Lease fees are payments for any land or equipment leased from the franchisor,billed either as a flat monthly or an annual fee.

Silvar,a chain of automotive showrooms,charges its franchisees approximately four percent of new sales and puts this money in a special fund to pay for advertising and promotion.In this instance,the franchisees are paying ________ fees.

Which of the following is true for a franchisee that was terminated-at-will by a franchisor?