Exam 40: Franchises and Special Forms of Businesses

An ________ refers to an agency that arises when a franchisor creates the image that a franchisee is its agent when in fact an actual agency does not exist.

In a(n)________ franchise,the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor.

Which of the following closely resembles a joint venture?

The area franchisee is also called a ________.

The termination-at-will clause allows franchisees to sue a franchisor in case of an unjust termination of franchise.

Licensing refers to a business arrangement that occurs when the owner of intellectual property contracts to permit another party to use the intellectual property.

A single failure by a franchisee to meet a quality-control standard is sufficient cause for termination.

Joint venturers are permitted to create a corporation that operates the joint venture.

The Uniform Franchise Offering Circular (UFOC)satisfies only the Federal Trade Commission (FTC)and a separate disclosure document should be prepared by the franchisor in accordance with state regulations.

JK Developers and KL Designs,who are experts in architectural engineering,form a business agreement whereby they agree to work together for two years in order to complete the design of a planetarium.This is an example of a ________.

When is a franchisor allowed to terminate a franchise? Why are termination-at-will clauses generally held to be void?

Ubiquitous Enterprises is a franchisee of HotPan chain of restaurants.One afternoon,Linda,an employee of a HotPan restaurant owned by the franchisee,is mopping the floor.Gary,a customer who enters the restaurant is talking on his cell phone and does not notice Linda mopping the floor.He slips on the wet floor while walking to the counter and is injured.Who among the following is liable for Gary's injuries?

A royalty fee is an amount paid by the franchisor to the franchisee for the continuous use of its trademarks and maintenance of quality.

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

A joint venture is generally an implied contract that lasts until a party disassociates at will.

A joint venture is an arrangement in which two or more business entities combine their resources to pursue an ongoing business operation.

Which of the following documents sets forth the terms and conditions of a franchise?

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

A franchisor deals with the franchisee as an independent contractor.

Which of the following is imposed upon a franchisor that violates the Federal Trade Commission (FTC)franchise disclosure rule?