Exam 31: Sole Proprietorships and Private Franchises

Frooty Drinks, Inc., and Great Gulp Bottling Company have a processing-plant franchise arrange?ment. This involves the transfer of

Jody owns KuppaJava Kiosks, a sole proprietorship. Jody's liability is

Otis is interested in buying a franchise from Plentiful Inc. This transaction, like other franchise deals, is regulated to protect

A franchisor can require a franchisee to purchase certain supplies from the franchisor at an established price.

Kelly, the owner of Llama Farms, a sole proprietorship, wants to obtain additional busi?ness capital but to maintain control. This can best be accomplished by

Leigh wants to go into the business of construction contracting. Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be

A sole proprietorship lacks continuity on the death of the proprietor.

The termination provision of a franchise contract is usually more favorable to the franchisor.

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

Jack buys a Kitchens, Inc., franchise, which the franchisor later termi?nates. In determining whether the termination was proper, a court will generally

Julia owns and operates Collectable Dolls without creating a separate business organization. She receives all the profits from the doll sales. Collectable Dolls is most likely a

In raising capital, a sole proprietor is limited to his or her personal funds-a loan is not possible.

Some states require that a franchisor submit advertising aimed at prospective franchisees to the state for approval.

Sweet Styles, Inc., a franchisor of clothing stores, wishes to standardize the pricing practices of its franchisees that have engaged in price-cutting to increase their respective shares of the market. The most prudent action might be for Sweet to

In determining whether a franchisor acted in good faith in terminating a franchise relationship, a court would balance the rights of both parties.

Star Resorts Corporation wants to terminate its franchise arrangement with Tony. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Tony

Pilar is interested in buying a franchise from Quixotic Travel & Tours Corporation. Quixotic must disclose material facts that Pilar needs to make an informed decision concerning this purchase, according to

Fact Pattern 31-1 Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a franchise under the Jumbo Juice trade name as a member of a select group of dealers that engage in retail juice sales. -Refer to Fact Pattern 31-1. To potential investors, Jumbo Juice must provide

In-Home Maid Service Company uses a Web site to provide downloadable information to prospective franchises. This online information is the equivalent of an offer that must comply with

Phillipa is the sole proprietor of Fun Floral Arrangements. As a sole proprietor, on Fun Floral Arrangements' profits, Phillipa