Exam 30: Sole Proprietorships and Franchises

The franchise agreement may specify whether the premises for the business must be leased or purchased outright.

Olav owns Precision Painting,a sole proprietorship. Olav's liability is

Graham buys from Hook,Line & Sinker Corporation the exclusive right to sell Hook,Line & Sinker fishing gear in a certain area. Their franchise agreement requires Graham to pay certain administrative expenses. Their agreement may also require Graham to pay a percentage of the franchisor's

A sole proprietor does not own the entire business.

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. -Jumbo Juice makes earnings claims to potential investors. For those claims,the franchisor

Sauces n'Syrups,Inc.,and Thad's Sweet & Spicy Bottling Plant have a manufacturing franchise arrange-ment. This involves the transfer of

A franchisee is generally legally independent of the franchisor.

A sole proprietor does not own the entire business.

The franchise agreement is not likely to set out standards for the franchise to meet.

A franchisee ordinarily does not pay a fee for a franchise license (the privilege of being granted a franchise).

In a manufacturing arrangement,a franchisor transmits to a franchisee the essential ingredients or formula to make a particular product.

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship,like all other franchise relationships,is governed by