Which of the Following Is True Regarding "Termination-At-Will" Clauses in Franchise

question 2

Multiple Choice

Which of the following is true regarding "termination-at-will" clauses in franchise agreements?

• A) There is no problem with termination-at-will clauses in franchise agreements.
• B) There is no problem with termination-at-will clauses in franchise agreements, so long as the franchisee was represented by legal counsel during negotiations.
• C) There is no problem with termination-at-will clauses in franchise agreements, so long as the franchisee is allowed to retain any equipment.
• D) Termination-at-will clauses in franchise agreements are generally void, except for franchises specializing in fast food.
• E) Termination at will clauses in franchise agreements are generally void.

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Definitions:

After-Tax Discount Rate

The discount rate used in capital budgeting that takes into account the effects of taxes on the project's cash flows.

Income Tax Rate

The portion of an individual's or corporation's income that goes to taxes.

Straight-Line Depreciation

A technique for segmenting the cost of a material asset over its life in even annual segments.

After-Tax Discount Rate

The discount rate used in financial calculations that reflects the net cost of capital after accounting for the effects of taxes.