Exam 31: Franchise and Special Forms of Business

A franchise agreement usually contains a license that grants the franchisee the right to use certain intellectual property that is owned by the franchisor.

Which of the following is true regarding "termination-at-will" clauses in franchise agreements?

In which type of franchise does the franchisor provide a "secret formula" to the franchisee?

The franchisor typically deals with the franchisee as an independent contractor.

A "distributorship" franchise is used when the franchisor manufactures a product and licenses a retail dealer to distribute the product to the public.

A joint venture is an arrangement in which two or more business entities combine their resources to pursue a single project or transaction.

A(n)________ fee is a fee for such things as advertising and promotional campaigns and administrative costs.

Which of the following is true regarding a joint venture?

A(n)________ fee is a fee for the continued use of the franchisors trade name,property,and assistance that is often computed as a percentage of the franchisee's gross sales.

What type of information need not be disclosed in a Uniform Franchise Offering Circular?

Under Federal Trade Commission rules,franchisors are required to make sales projections related to hypothetical franchisees.

Unreasonably strict application of a just cause termination clause in a franchise agreement constitutes wrongful termination.

Connie knows that you are studying the law of business organizations.She comes to you for advice regarding what types of fees she will have to pay if she decides to operate a franchise,and how those fees are typically computed.What would you tell her?

Royalty fees are usually paid on a ________ basis.

The parties participating in a joint venture owe each other a fiduciary duty of loyalty.

There are four (4)basic forms of franchises: (1)trusteeship franchise; (2)manufacturing plant franchise; (3)"chain-link" franchise; and (4)geographical franchise.

Which of the following is not an advantage of franchising?

What are the ethical issues involved in franchising businesses in foreign nations,when doing so puts local businesses out of business,and may cause cultural disruptions?

Licensing occurs when one business or party that owns intellectual property,the licensee,contracts to permit another business or party,the licensor,to use its intellectual property in the distribution of goods,services,software,and digital information.

If a franchise is properly organized and operated,the franchisor and franchisee are separate legal entities.