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Exam 31: Sole Proprietorships and Private Franchises

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Question 31

True/False

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A state deceptive trade practice statute may limit the actions of franchisors.

A) True
B) False

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Question 32

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A sole proprietor may own and manage any type of business.

A) True
B) False

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Question 33

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Roller Rinks,Inc.(RRI) grants a franchise to Sven to operate an RRI rink.RRI may require Sven to pay a percentage of his

Cal sells "DownSize," a weight-reduction program,from a Web site,in competition with Eat-Less Inc.'s product "Fit 'n Trim." Eat-Less files a suit against Cal,alleging in part that he is a sole proprietor,but his enterprise should be deemed a different form of business.Cal's enterprise should most likely be considered

A sole proprietorship's income is taxed as the owner's personal income.

Star Resorts Corporation wants to terminate its franchise arrangement with Tony.Their contract does not provide for notice of termination or set a time for winding up the business.This means that to wind up,Tony

Starting a sole proprietorship is easier and less costly than starting any other form of business.

An agreement that requires a franchisee to buy materials exclusively from the franchisor may violate antitrust laws.

Worldwide Realtors,Inc.,sells a franchise to XL Sales Company.XL is

Leigh wants to go into the business of construction contracting.Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be

Euro Autos & Trucks,Inc.,licenses Fancy Vehicles Corporation,an automobile dealership,to sell its products.This is

CheezBurger Heaven,Inc.,conducts a chain-style franchise.This involves the transfer to Clive,one of its franchisees,of

Opie buys a franchise from Paradise Clothing Corporation.Because this franchise relationship is,like all other franchise relationships,primarily of a certain type,it is governed by

A franchise exists when the owner of a trademark licenses its use to another party to sell goods or services.

Handee Hardware,Inc.,grants a franchise to Ivan to open and operate a Handee Hardware store.Handee will likely charge Ivan

Chicago Coca-Cola Bottling Company is

A franchisee is a party who sells a franchise.

Much franchise litigation involves claims of wrongful termination.

Owen plans to open Owen's Pets Store,a pet sales and pet supplies outlet,and to hire Quimby and Ruth.Owen will invest only his own money.He does not expect to make any profit for at least two years and to make almost no profit for the first three years,but he hopes to expand eventually.Which form of business organization would be most appropriate What are the chief characteristics,advantages,and disadvantages of this form of business organization If Owen wants to obtain additional capital to expand the business,but does not want to lose control of the firm,what is his best option

Nico is interested in buying a franchise from Oz Inc.For Nico to make an informed decision concerning this purchase,Oz must disclose in writing or online