Exam 40: Franchise and Special Forms of Business

The Uniform Franchise Offering Circular (UFOC) satisfies only the Federal Trade Commission (FTC) and a separate disclosure document should be prepared by the franchisor in accordance with state regulations.

If the product or service offered by a franchisor has not been tested, it should appear on the Federal Trade Commission (FTC) franchise notice.

The Federal Trade Commission (FTC) franchise rule is a rule that requires franchisors to make full presale disclosures to prospective franchisees.

An ________ refers to an agency that arises when a franchisor creates the image that a franchisee is its agent when in fact an actual agency does not exist.

Which of the following is true of the liabilities of a franchisor and a franchisee?

A joint venture is an arrangement in which two or more business entities combine their resources to pursue an ongoing business operation.

Which of the following is imposed upon a franchisor that violates the Federal Trade Commission (FTC) franchise disclosure rule?

A franchisor discloses a cautionary statement that reads, "Caution: Some outlets have sold this amount. There is no assurance you'll do as well. If you rely upon our figures, you must accept the risk of not doing so well." This is an instance of ________.

YouKnow Inc. is a corporation that creates educational resources. It grants Middlewest Public School the right to exclusively use its online encyclopedias for three years, for a fee. In this arrangement, YouKnow Inc. is the ________.

My-Wear Inc. is an apparel retailer based in San Francisco. It operates through a franchise named KL Apparels in Santa Clara. After about six years of operation, My-Wear Inc. cancelled the franchise with KL Apparels without any notification. The franchise period specified in the contract had not expired and the franchisee had met all standards stated by the franchisor. This constitutes a ________.

Concreate Development requires architects to design its latest venture-a 64-story skyscraper. It makes a business arrangement with Excellent Architecture and acquires four architects on contract for the ongoing project. This is an instance of a ________.

The Federal Trade Commission (FTC) does not require the registration of the disclosure document with the FTC prior to its use.

A joint venturer is not personally liable for the debts and obligations of the joint venture partnership.

Which of the following documents sets forth the terms and conditions of a franchise?

A(n) ________ is established when one party licenses another party to use the first party's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services.

Joint venturers generally have equal rights to manage a joint venture.

Most franchise agreements permit a franchisor to terminate the franchise ________.

Which of the following is true of a franchise agreement?

The Uniform Franchise Offering Circular (UFOC) refers to a uniform disclosure document that requires a franchisor to make specific presale disclosures to prospective franchisees.

Which of the following is true of a joint venture corporation?