Which of the Following Statements Is TRUE with Respect to Franchises

question 11

Multiple Choice

Which of the following statements is TRUE with respect to franchises?

• A) Franchisors do not worry about whether they may be held liable for actions of franchisees because each franchisee is a separate business.
• B) Franchise agreements do not contain trademark licences.
• C) Although other arrangements are available for other types of business, a true franchise is always concerned with the food service industry.
• D) A franchise arrangement always includes, among other things, an agency relationship.
• E) Franchisors typically include a provision in their franchise arrangements that says that the franchisee is not an agent of the franchisor.

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Definitions:

Positive Supply

A situation where an increase in price leads to an increase in the quantity supplied, holding other factors constant.

Cockatoos

A group of bird species known for their distinctive crests and social behavior, not directly related to economic terms.

Smuggled

Smuggled goods are those transported illegally, avoiding regulatory oversight or tariffs.

Transit

The act or process of moving people or goods from one location to another, often involving public transportation systems.