Podcast
Questions and Answers
What is the purpose of the Franchise Disclosure Document (FDD)?
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?
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?
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?
What is the typical payment arrangement for a franchise license?
What is the primary role of the franchise contract?
What is the primary role of the franchise contract?
What is the primary purpose of state laws regulating franchises?
What is the primary purpose of state laws regulating franchises?
What is a common reason why franchise agreements limit the franchisee's ability to sell the franchise?
What is a common reason why franchise agreements limit the franchisee's ability to sell the franchise?
What is a potential risk for a franchisor that exercises too much control over its franchisees?
What is a potential risk for a franchisor that exercises too much control over its franchisees?
What determines the duration of a franchise?
What determines the duration of a franchise?
What is a common practice in the early stages of a franchise relationship?
What is a common practice in the early stages of a franchise relationship?
Why might the duration of a franchise contract be correlated with the term of the lease for the business premises?
Why might the duration of a franchise contract be correlated with the term of the lease for the business premises?
What is a purpose of periodic inspections by the franchisor?
What is a purpose of periodic inspections by the franchisor?
What is the primary purpose of a franchise agreement?
What is the primary purpose of a franchise agreement?
What is typically determined by the franchisor?
What is typically determined by the franchisor?
What may be required by the franchise agreement in addition to the initial fee?
What may be required by the franchise agreement in addition to the initial fee?
What is received by the franchisor under the franchise agreement?
What is received by the franchisor under the franchise agreement?
What may be specified in the franchise agreement regarding business premises?
What may be specified in the franchise agreement regarding business premises?
What may be given to the franchisee in some franchise contracts?
What may be given to the franchisee in some franchise contracts?
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