Under the Franchising Code of Conduct What Must the Franchisor

question 14

Multiple Choice

Under the Franchising Code of Conduct what must the franchisor do before entering into a franchise agreement?

• A)Make a full disclosure of any risks to the franchisee.
• B)Require proof from the franchisee that the franchisee has obtained independent legal advice about the key aspects of the franchise agreement.
• C)Provide a bank guarantee to support the financial stability of the franchise business.
• D)All of the above.
• E)A and B only.

---

Definitions:

Economic Welfare

The overall well-being and standard of living of people in an economy, often measured by standards such as health, education, and income.

Negative Externalities

occur when the production or consumption of goods and services imposes costs on third parties not involved in the transaction.

Underground Economy

consists of unreported income from the production of legal goods and services, either due to tax avoidance or the desire to avoid government regulations.

Gross Domestic Product

The total valuation in terms of money or market prices of all goods and services completed within a country’s borders within a specified time period.