Exam 40: Franchises and Special Forms of Businesses

Which of the following is true of intellectual property of a franchisor?

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 ________.

A franchisor is not permitted to terminate a franchise under any cause.

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

The party to whom a license is granted is known as the ________.

Explain in brief the four basic types of franchises.

Rio-Werner Corporation owns Rio's Sandwiches, a fast-food restaurant in New Jersey.It wants to operate in five cities on the west coast by means of franchisees which make and sell all menu items from Rio's Sandwiches.Which of the following would best suit the Rio-Werner Corporation's franchise plan?

Which of the following is true of a joint venture corporation?

A franchisor discloses a cautionary statement that reads, "Caution: Some outlets have sold this amount.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 ________.

In a ________ 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.

A joint venture resembles a conglomeration, with a parent company and subsidiaries.

A franchisor deals with the franchisee as an independent contractor.

In a(n)________ franchise, the franchisor manufactures a product and licenses a retail dealer to sell the product to the public.

Which of the following closely resembles a joint venture?

FTC franchise rule is a rule that requires franchisors to make full presale disclosures to prospective franchisees.

My-Wear Inc.is an apparel retailer based in San Francisco.It operates through a franchise named KL Apparels Ltd.in Santa Clara.After about six years of operation, My-Wear Inc.cancelled the franchise with KL Apparels without any notification.The franchise period specified in the contract has not expired and the franchisee had met all standards stated by the franchisor.This constitutes a ________.

A(n)________ is established when one party licenses another party to use the first party's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services.

A franchisor that makes sales or earnings projections based on hypothetical examples need not disclose the assumptions underlying the estimates.

Explain in brief the concept of joint venture as a business arrangement.

Unless otherwise states, the franchisor is liable for the torts of its franchisee.