Question 1

Which of the following is true of a joint venture?

Accepted Answer

A) The parties to a joint venture are considered limited partners. 
B) Both parties to a joint venture have equal rights to manage the venture. 
C) A joint venture is a partnership that lasts for multiple projects. 
D) Parties to a joint venture are exempt from fiduciary duties to each other.

Question 2

Apparent agency arises when a franchisee creates the appearance of being a franchisor's agent when in fact an actual agency does not exist.

Accepted Answer

A) True 
 B)False

Question 3

Termination-at-will clauses in franchise agreements are generally held to be void.

Accepted Answer

A) True 
 B)False

Question 4

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.

Accepted Answer

A) royalty fee 
B) assessment fee 
C) lease fee 
D) contingency fee

Question 5

Explain the four basic types of franchises in brief.

Accepted Answer

The answer of Explain the four basic types of franchises...

Question 6

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

Accepted Answer

A) processing plant 
B) area 
C) distributorship 
D) chain-style

Question 7

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 ________.

Accepted Answer

A) licensing arrangement 
B) franchise 
C) limited partnership 
D) joint venture

Question 8

Limonelle Corporation owns the secret formula for a popular beverage brand Limonelle.The corporation operates through franchises in over 50 countries.It uses a secret formula to prepare the drink concentrate which is dispatched to the franchises world over.These franchises then prepare and bottle the beverage for distribution.Which of these types of franchises has Limonelle adopted?

Accepted Answer

A) chain-style franchise 
B) processing plant franchise 
C) distributorship franchise 
D) area franchise

Question 9

The party who grants a license is known as the ________.

Accepted Answer

A) licensee 
B) licensor 
C) grantee 
D) grantor

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) General partnership 
B) Leasing 
C) Licensing 
D) Joint venturing

Question 12

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 ________.

Accepted Answer

A) termination at will 
B) termination for cause 
C) contractual termination 
D) suspension by franchisor

Question 13

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

Accepted Answer

A) at will 
B) after five years of franchising 
C) for cause 
D) without just cause

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

The answer of Explain the extent of liability of a...

Question 18

An apparent agency is created when a franchisor and franchisee use the same trade name and trademarks but make no effort to inform the public of their separate legal status.

Accepted Answer

A) True 
 B)False

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true of a franchise that was terminated-at-will by a franchisor?

Accepted Answer

A) The franchisee can only recover damages. 
B) The franchisor cannot be held liable for a termination-at-will. 
C) The franchisee cannot apply for a franchisee again in the same field of business. 
D) The franchisee can sue to recover damages and the franchise.

Exam 40: Franchises and Special Forms of Businesses

Which of the following is true of a joint venture?

Apparent agency arises when a franchisee creates the appearance of being a franchisor's agent when in fact an actual agency does not exist.

Termination-at-will clauses in franchise agreements are generally held to be void.

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.

Explain the four basic types of franchises in brief.

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

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 party who grants a license is known as the ________.

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

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

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

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

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

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

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

An apparent agency is created when a franchisor and franchisee use the same trade name and trademarks but make no effort to inform the public of their separate legal status.

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 is true of a franchise that was terminated-at-will by a franchisor?