Which of the Following Most Clearly Indicates Why the Franchiser

question 103

Multiple Choice

Which of the following most clearly indicates why the franchiser of a product has a strong incentive to monitor the quality of the product among all of the franchised sellers?

• A) The franchiser has a monopoly on the sale of products in his industry.
• B) If quality is not maintained, the franchiser will be limited in his ability to sell other franchises and collect franchise fees.
• C) If quality is not maintained, the government will prohibit future sales of the franchises.
• D) Franchisers do not gain financially by maintaining quality, but they generally maintain quality anyway because they are consumers as well as producers.

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Definitions:

Expressed Intent

The explicitly stated purpose or goal of an individual or entity, made clear through verbal or written communication.

Intended Third-party

Someone who, although not a direct participant in a contract or agreement, stands to benefit from the execution of the agreement.

Incidental Third-party

A person or entity indirectly involved or unintentionally benefited by a transaction or contract between two other parties.

Beneficiary

An individual or entity designated to receive benefits or assets from an insurance policy, will, or trust.