Exam 30: Sole Proprietorships and Franchises

Challenge Games Corporation licenses the trademarks to its products to Direct Marketing,Inc.,to reproduce on caps,sweatshirts,and similar goods for sale. This is

A franchisor's decision to terminate a franchise may be made in the normal course of business operations.

Kari owns and operates Living Earth Garden Shop,an outdoor tool and landscaping supplies retail store,as a sole proprietorship. When Kari dies,Living Earth will automatically

Wren owns and operates Yoga Center without creating a separate business organization. She receives all the profits from the fees for the classes and the sales of the center's merchandise. Yoga Center is most likely

Without creating a separate business organization,Reynold starts up,and assumes the financial risk of,Sole Savers,a new,pre-owned auto sales enterprise. Reynold is

Traditionally,entrepreneurs have used one major business form-the sole proprietorship.

Ralph is interested in buying a franchise from Sparkle Beverages Inc. For Ralph to make an informed decision concerning this purchase,Sparkle Beverages must disclose in writing or in electronic form

Bill sells Corner Deli & Groceries,a sole proprietorship,to Diane. This is

A franchisee is generally economically independent of the franchisor's integrated business system.

A franchise relationship may be governed by the law covering sales contracts as expressed in Article 2 of the Uniform Commercial Code.

The duration of a franchise is a matter determined by federal or state statutes.

A sole proprietor is free to make any decision he or she wishes concerning the business.

Any lawsuit against the business does not lead to unlimited personal liability for the owner of a sole proprietorship.

We-Haul Equipment Rentals,Inc.,uses a Web site to provide downloadable in-formation to prospective franchisees. This electronic information is the equivalent of an offer that must comply with

A sole proprietorship offers less flexibility than does a partnership or a corporation.

Fletcher buys a Greesy's Burgers,Inc.,franchise. Greesy's requires that its franchisees buy its products exclusively for every phase of their operations. Because Fletcher wishes to buy less expensive products,he challenges the requirement. His best argument is probably that the requirement violates

Mucho Tacos,Inc.,sells franchises. Mucho Tacos imposes on its franchisees standards of operation and personnel training methods. What is the potential pitfall to Mucho Tacos if it exercises too much control over its franchisees?

If a franchisor's decision to terminate a franchise is made in the normal course of business and reasonable notice is given,it is less likely that the termination will be considered wrongful.

The day-to-day operation of the franchise business normally is under the control of the franchisor.

To protect franchisees against arbitrary of bad faith termination,state law may prohibit termination without good cause.