Exam 35: Sole Proprietorships and Franchises

A franchise is a form of business organization.

Under no circumstances may a franchisor establish an additional fran?chise in a territory allotted to a franchisee.

Most fast-food chains are distributorships.

Instead of setting up a business to market her own products, Krissy con?sid?ers entering into a distributorship franchise with Little Breweries Corporation. This involves the transfer of

A franchise agreement between Simple Software Company and Total Game, Inc., is silent on a time for termination of the franchise. Simple may

An owner's license of a formula to make a certain product to an outside party is a franchise.

Nico is interested in buying a franchise from Oz Inc. For Nico to make an informed decision concerning this purchase, Oz must disclose in writing or online

Euro Autos & Trucks, Inc., licenses Fancy Vehicles Corporation, an auto?mobile dealership, to sell its products. This is

A sole proprietorship's income is taxed as the firm's profits, not as the owner's personal income.

Pat enters into an agreement with Quik Food, Inc., to operate a franchise in Region City. Later, Quik grants franchises to others within the city, Pat files a suit to close them. This suit will likely

Starting a sole proprietorship is easier and less costly than starting any other form of business.

A franchisor may not specify personnel training methods.

Cal sells "DownSize," a weight-reduction program, from a Web site, in competition with Eat-Less Inc.'s product "Fit 'n Trim." Eat-Less files a suit against Cal, alleging in part that he is a sole proprietor, but his enterprise should be deemed a different form of business. Cal's enter?prise should most likely be considered

Carl sells Direct Marketing Enterprises, a sole proprietorship, to Eve. This is a transfer of

The parties to a franchise agreement may determine what constitutes the grounds for the termination of their relationship.

Mello Coffee Shops, Inc., sells a franchise to Noah's Arch, a café. Mello is

Most franchise agreements provide that termination must be "for cause."

Handee Hardware, Inc., grants a franchise to Ivan to open and operate a Handee Hardware store. Handee will likely charge Ivan

Riley is interested in buying a franchise from Soft Shoe Corporation. Soft Shoe must disclose material facts that Riley needs to make an informed decision concerning this purchase, according to

A sole proprietorship automatically dissolves on the death of the owner.