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Questions and Answers
A balance sheet reports a company's profit or loss over a specific period of time.
A balance sheet reports a company's profit or loss over a specific period of time.
False
The franchise agreement is a summary of the franchisor's financial status and strength.
The franchise agreement is a summary of the franchisor's financial status and strength.
False
A profitable franchisor typically has decreasing revenue trends.
A profitable franchisor typically has decreasing revenue trends.
False
The income statement reports a company's net worth.
The income statement reports a company's net worth.
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The FDD provides information about the franchise agreement's terms and conditions.
The FDD provides information about the franchise agreement's terms and conditions.
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Liabilities are a category of the income statement.
Liabilities are a category of the income statement.
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Item 8 of the FDD provides information about the franchisor's obligations to the franchisee.
Item 8 of the FDD provides information about the franchisor's obligations to the franchisee.
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The FDD provides a description of the initial investment required to establish the franchise in Item 10.
The FDD provides a description of the initial investment required to establish the franchise in Item 10.
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The franchisor's obligations to the franchisee are described in Item 9 of the FDD.
The franchisor's obligations to the franchisee are described in Item 9 of the FDD.
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Item 12 of the FDD provides information about the franchisor's trademarks and service marks.
Item 12 of the FDD provides information about the franchisor's trademarks and service marks.
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The FDD describes the patents and copyrights that the franchisee can use in Item 15.
The FDD describes the patents and copyrights that the franchisee can use in Item 15.
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Item 7 of the FDD provides a reference table that indicates where in the franchise agreement franchisees can find the obligations they have agreed to.
Item 7 of the FDD provides a reference table that indicates where in the franchise agreement franchisees can find the obligations they have agreed to.
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A balance sheet reports a company’s profit or loss over a specific period of time.
A balance sheet reports a company’s profit or loss over a specific period of time.
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A franchise agreement is a summary of a company's financial condition.
A franchise agreement is a summary of a company's financial condition.
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Increasing revenue trends of 10% are considered a positive sign on a franchisor's income statement.
Increasing revenue trends of 10% are considered a positive sign on a franchisor's income statement.
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A prospective franchisee should review the franchise agreement without consulting a professional advisor.
A prospective franchisee should review the franchise agreement without consulting a professional advisor.
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The income statement is more specific than the balance sheet.
The income statement is more specific than the balance sheet.
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The franchise agreement is a legally binding document that outlines the terms and conditions of the franchise purchase.
The franchise agreement is a legally binding document that outlines the terms and conditions of the franchise purchase.
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