Exam 36: Sole Proprietorships and Franchises

Jim organized, and owns and operates, Jim's Landscaping Service in the simplest form of business organization. This is

A franchisor can require a franchisee to purchase certain supplies from the franchisor at an established price.

Good faith and fair dealing are not important in terminating a franchise relationship.

Stacy contracts to buy a franchise from Tender Steak House Company. In this contract, as in most franchise contracts, the determination of the territory to be served is made by

Inger is a franchisee of Honey Bear Restaurants, LLC Their contract gives Honey Bear the right to control virtually all aspects of Inger's operation, including the hiring of employees. One of the employees, Joris commits a tort against Kiley, one of Inger's customers. Kiley files a suit against Honey Bear. Honey Bear is most likely

In a sole proprietorship, the proprietor shares the burden of any losses or liabilities incurred by the business enterprise with the government.

Otis is interested in buying a franchise from Plentiful Markets Inc. This transaction, like other franchise deals, is regulated to protect

The simplest form of business is a sole proprietorship.

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

Burger Heaven, Inc., conducts a chain-style franchise. This involves the transfer to Chester, one of its franchisees, of

A sole proprietorship lacks continuity on the death of the proprietor.

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

A franchisor is the purchaser of a franchise.

A franchise contract may use only one type of business organization-the sole proprietorship.

A franchisee can operate as an independent businessperson but cannot then obtain the advantages of a national organization.

Real Events Promotion Corporation licenses trademarks to Stadium Souvenirs, Inc., to use in selling caps, sweatshirts, and similar goods. This is

Echo enters into an agreement with Deep Pan Pies, Inc., to operate a franchise in Centre City. Later, Deep grants franchises to others within the city. Echo files a suit to close them. If the court rules in Echo's favor it will most likely be on the ground that

Typically, the franchisee determines the territory to be served by the franchise.

The duration of a franchise is a matter to be determined between the parties.

Doc's Sports Club and Elite Fitness Corporation enter into a franchise agreement that provides for its termination at any time for "cause." Doc's fails to meet Elite's membership sales quota. Is this "cause" for termination Explain.