Which of the Following Usually Occurs in a Franchise Agreement

question 38

Multiple Choice

Which of the following usually occurs in a franchise agreement?

• A)The franchisee agrees to pay a licence fee and royalties for the right to use or sell the subject matter of the franchise.
• B)The franchisee agrees to market the intellectual property of the franchisor.
• C)The franchisor owns the rights to any products,trade names and concepts that are the basis of the franchise.
• D)All of the above.
• E)A and B only.

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Definitions:

Minimum Acceptable Rate

The lowest return on an investment that a manager or investor is willing to accept, often based on risk assessment or alternative investment opportunities.

Project Acceptance

The process of approving a proposed project based on analysis of its feasibility and alignment with organizational goals.

Multiple IRR's

The possibility of obtaining more than one internal rate of return for a project or investment due to unconventional cash flows, such as alternating periods of negative and positive cash flows.

Negative NPV

A situation where the net present value of a project or investment is negative, indicating that the expected cash inflows are not sufficient to cover the initial investment and the cost of capital.