Which of the Following Is True for Franchisors

question 2

Multiple Choice

Which of the following is true for franchisors?

• A) The franchisor has to pay the franchisee to be part of the franchise system.
• B) The franchisor licenses the trademark from the franchisee.
• C) The franchisor must change its operations to suit those of the franchisee.
• D) The franchisor collects royalty payments from the franchisee.
• E) The franchisor pays startup costs for the franchisee.

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Definitions:

Accounts Payable

The amounts a company owes to its suppliers or vendors for goods or services received but not yet paid for; a liability on the balance sheet.

Collections Float

Float created while funds from customers’ cheques are being deposited and cleared through the cheque collection process.

Disbursement Float

Float created before cheques written by a firm have cleared and been deducted from the firm’s account. Disbursement float causes the firm’s own cheque-book balance to be smaller than the balance on the bank’s records.

Net Float

The difference between a firm’s disbursement float and collections float.