Business Law: Franchise Agreements
18 Questions
3 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the purpose of the Franchise Disclosure Document (FDD)?

  • To register the franchise contract with a state official
  • To outline the rights and duties of the franchisor
  • To specify the terms and conditions of the franchise
  • To protect franchisees by requiring disclosure of certain information (correct)

    • What type of expenses might a state law require a franchisor to disclose?

  • Initial investment costs
  • Recurring expenses (correct)
  • Projected profits
  • All of the above

    • What happens if either party fails to perform their contractual duties in a franchise contract?

  • The contract is terminated
  • The franchisor takes over the franchise
  • A lawsuit for breach of contract may be filed (correct)
  • The franchisee is refunded their initial investment

    • What is the typical payment arrangement for a franchise license?

    <p>An initial fee or lump-sum price</p> Signup and view all the answers

    What is the primary role of the franchise contract?

    <p>To outline the terms of the franchise agreement</p> Signup and view all the answers

    What is the primary purpose of state laws regulating franchises?

    <p>To protect franchisees from potential risks</p> Signup and view all the answers

    What is a common reason why franchise agreements limit the franchisee's ability to sell the franchise?

    <p>To control the quality of the franchise</p> Signup and view all the answers

    What is a potential risk for a franchisor that exercises too much control over its franchisees?

    <p>Potential liability</p> Signup and view all the answers

    What determines the duration of a franchise?

    <p>The terms agreed upon by the parties</p> Signup and view all the answers

    What is a common practice in the early stages of a franchise relationship?

    <p>Establishing a short trial period</p> Signup and view all the answers

    Why might the duration of a franchise contract be correlated with the term of the lease for the business premises?

    <p>To coincide with the renewal of the business lease</p> Signup and view all the answers

    What is a purpose of periodic inspections by the franchisor?

    <p>To control the quality of the franchise</p> Signup and view all the answers

    What is the primary purpose of a franchise agreement?

    <p>To outline the responsibilities and obligations of the franchisee</p> Signup and view all the answers

    What is typically determined by the franchisor?

    <p>The location of the franchise</p> Signup and view all the answers

    What may be required by the franchise agreement in addition to the initial fee?

    <p>A percentage of the franchisor's advertising costs</p> Signup and view all the answers

    What is received by the franchisor under the franchise agreement?

    <p>A percentage of the franchisee's sales</p> Signup and view all the answers

    What may be specified in the franchise agreement regarding business premises?

    <p>Whether the premises must be leased or purchased</p> Signup and view all the answers

    What may be given to the franchisee in some franchise contracts?

    <p>Exclusive territorial rights</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser