Question 1

Beeline Inc. offers entrepreneurs the opportunity to operate a franchise under the Beeline trade name as a dealer that sells and leases Beeline equipment. To potential franchisees, Beeline must provide

Accepted Answer

A)   no earnings figures.
B)   hypothetical earnings figures.
C)   projected earnings figures.
D)   none of the choices.E) A) and D)
F) B) and C)

Question 2

Any business-except a sole proprietorship-must comply with business licensing requirements.

Accepted Answer

A) True 
 B)False

Question 3

Anton enters into an agreement with Burgers Inc. to operate a franchise in Centre City. Later, the franchisor grants franchises to others within the same territory, causing Anton to suffer a significant loss in profits. In Anton's suit against the franchisor, his best argument is that Burgers

Accepted Answer

A)   violated the antitrust laws.
B)   violated the implied covenant of good faith and fair dealing.
C)   violated the Federal Trade Commission's Franchise Rule.
D)   granted Anton the first Burgers franchise in Centre City.E) A) and B)
F) B) and D)

Question 4

Pay-More Convenience Stores, Inc., is a franchisor. Randy operates a Pay-More franchise. Seth is one of Randy's employees. As a franchisor, if Pay-More controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by

Accepted Answer

A)   no one.
B)   any person on the franchise premises.
C)   only persons with legitimate reasons to be on the franchise premises.
D)   Pay-More, Randy, or Seth.E) A) and B)
F) B) and C)

Question 5

The proprietor pays only personal income taxes on a sole proprietorship's profits.

Accepted Answer

A) True 
 B)False

Question 6

Del owns Everlast Painting, a sole proprietorship. Del's liability is

Accepted Answer

A)   limited by state statute and varies from state to state.
B)   limited to the extent of capital expenditures.
C)   limited to the extent of his or her original investment.
D)   unlimited.E) A) and D)
F) A) and C)

Question 7

In determining whether a franchisor acted in good faith when terminating a franchise agreement, a court will attempt to balance the rights of both parties.

Accepted Answer

A) True 
 B)False

Question 8

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Accepted Answer

A) True 
 B)False

Question 9

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Accepted Answer

A)   a franchisee.
B)   a franchisor.
C)   a partner.
D)   a principal.E) B) and C)
F) None of the above

Question 10

A franchise contract cannot give exclusive territorial rights to a certain geographic area to a franchisee, due to antitrust laws.

Accepted Answer

A) True 
 B)False

Question 11

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

Accepted Answer

A)   none of the choices.
B)   a corporation.
C)   a franchisee.
D)   a sole proprietorship.E) A) and B)
F) None of the above

Question 12

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Accepted Answer

A)   borrowing funds.
B)   bringing in partners.
C)   issuing stock.
D)   selling the business.E) A) and B)
F) A) and C)

Exam 30: Sole Proprietorships and Franchises

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Correct Answer
verified

Anton enters into an agreement with Burgers Inc. to operate a franchise in Centre City. Later, the franchisor grants franchises to others within the same territory, causing Anton to suffer a significant loss in profits. In Anton's suit against the franchisor, his best argument is that Burgers

Correct Answer
verified

Del owns Everlast Painting, a sole proprietorship. Del's liability is

Correct Answer
verified

Any business-except a sole proprietorship-must comply with business licensing requirements.

Correct Answer
verified

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Correct Answer
verified

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

Correct Answer
verified

A franchise contract cannot give exclusive territorial rights to a certain geographic area to a franchisee, due to antitrust laws.

Correct Answer
verified

Pay-More Convenience Stores, Inc., is a franchisor. Randy operates a Pay-More franchise. Seth is one of Randy's employees. As a franchisor, if Pay-More controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by

Correct Answer
verified

Beeline Inc. offers entrepreneurs the opportunity to operate a franchise under the Beeline trade name as a dealer that sells and leases Beeline equipment. To potential franchisees, Beeline must provide

Correct Answer
verified

The proprietor pays only personal income taxes on a sole proprietorship's profits.

Correct Answer
verified

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Correct Answer
verified

In determining whether a franchisor acted in good faith when terminating a franchise agreement, a court will attempt to balance the rights of both parties.

Correct Answer
verified

Exam 30: Sole Proprietorships and Franchises

Chase, the owner of Data Master, a sole proprietorship, wants to obtain additional business capital. This opportunity is most likely limited to

Correct AnswerverifiedShow Answer

Anton enters into an agreement with Burgers Inc. to operate a franchise in Centre City. Later, the franchisor grants franchises to others within the same territory, causing Anton to suffer a significant loss in profits. In Anton's suit against the franchisor, his best argument is that Burgers

Correct AnswerverifiedShow Answer

Del owns Everlast Painting, a sole proprietorship. Del's liability is

Correct AnswerverifiedShow Answer

Any business-except a sole proprietorship-must comply with business licensing requirements.

Correct AnswerverifiedShow Answer

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Correct AnswerverifiedShow Answer

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

Correct AnswerverifiedShow Answer

A franchise contract cannot give exclusive territorial rights to a certain geographic area to a franchisee, due to antitrust laws.

Correct AnswerverifiedShow Answer

Pay-More Convenience Stores, Inc., is a franchisor. Randy operates a Pay-More franchise. Seth is one of Randy's employees. As a franchisor, if Pay-More controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by

Correct AnswerverifiedShow Answer

Beeline Inc. offers entrepreneurs the opportunity to operate a franchise under the Beeline trade name as a dealer that sells and leases Beeline equipment. To potential franchisees, Beeline must provide

Correct AnswerverifiedShow Answer

The proprietor pays only personal income taxes on a sole proprietorship's profits.

Correct AnswerverifiedShow Answer

Haute Dogs Inc. sells a franchise to Ilene's Cuisine, a lunch truck. Ilene's Cuisine is

Correct AnswerverifiedShow Answer

In determining whether a franchisor acted in good faith when terminating a franchise agreement, a court will attempt to balance the rights of both parties.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified