A Business That Complies with FTC Franchise Requirements Meets All

question 12

Multiple Choice

A business that complies with FTC franchise requirements meets all of the following criteria except: ______.

• A) the franchisor must promise to provide a trademark or other commercial symbol.
• B) the franchisor must promise to exercise significant control or provide significant assistance in the operation of the business; any current and past litigation against the franchisor.
• C) the franchise must require a minimum payment of at least $540 during the first six months of operations.
• D) the franchise must require a minimum payment of at least $5,400 during the first six months of operations.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.

Gross Margin

A company's revenue minus its cost of goods sold, expressed as a percentage of revenue.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to finance its operations.

Current Assets

Current assets are a balance sheet item that represents the value of all assets that can reasonably be expected to be converted into cash within one year, including cash, marketable securities, accounts receivable, and inventory.