A Master Franchisee, in Addition to Having the Right to Open

question 10

Multiple Choice

A master franchisee, in addition to having the right to open and operate a specific number of locations in a particular area, also has the right to ________.

• A) stop making royalty payments if its sales decline
• B) sell products made by companies other than the franchisor
• C) offer and sell the franchise to other people in its area
• D) use its own operating manuals to run its franchise outlets
• E) stop making royalty payments if it is losing money

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Definitions:

Stock-Index Futures

Futures contracts based on stock indices, which allow investors to speculate on the future value of an index.

Sell

The action of transferring ownership of a security or asset to a buyer for an agreed price.

Long Position

The purchase of a security such as a stock or commodity with the expectation that the asset will increase in value.

Futures Contract

A formal contract for purchasing or selling an item at a pre-set price at a future date.