Which of the Following Is True of the Liabilities of a Franchisor

question 65

Multiple Choice

Which of the following is true of the liabilities of a franchisor and a franchisee?

• A) The franchisor is not liable for any tort arising out of the franchise.
• B) Both franchisee and franchisor are jointly liable for torts committed by either.
• C) Franchisees are only liable on their own contracts.
• D) Franchisors are always liable for the torts of the franchisees.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products based on a specific activity base.

Machine-Hours

A measure of production output or capacity, indicating the total hours that machinery is operated over a specific period.

Fixed Overhead

Regular, unchanged costs incurred by a business for its operations regardless of varying levels of production, such as rent, salaries, and insurance.

Unused Capacity

The available resources or production capabilities that are not currently being utilized.