Exam 40: Franchise and Special Forms of Business

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

Joint venturers do not owe each other fiduciary duties of loyalty and care as they are not bound by a contract.

A joint venture resembles a conglomeration, with a parent company and subsidiaries.

Explain the four basic types of franchises in brief.

A(n) ________ is an amount paid by the franchisee to the franchisor for the continued use of the franchisor's trade name, property, and assistance that is often computed as a percentage of the franchisee's gross sales.

A franchise is an example of a license.

Explain the extent of liability of a franchisor and a franchisee with an example.

Which of the following is true of a strategic alliance?

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 ________.

The area franchisee is also called a ________.

A franchisor that makes sales or earnings projections based on hypothetical examples need not disclose the assumptions underlying the estimates.

If a franchisor makes sales or earnings projections based on hypothetical examples, the franchisor must ________.

A distributorship franchisee is called a subfranchisor.

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

In a(n) ________ franchise, the franchisor manufactures a product and licenses a retail dealer to sell the product to the public.

A strategic alliance is an arrangement between two or more companies whereby they agree to ally themselves and work together to accomplish a designated objective.

Which of the following types of clauses, in a franchise agreement, provides that any claim or controversy arising from the franchise agreement or an alleged breach thereof will be settled outside the courts?

In a franchise agreement, by default, the franchisor and franchisee are separate legal entities.

Which of the following resembles a joint venture?

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