Which of the Following Statements About Buying a Franchise Is

question 255

Multiple Choice

Which of the following statements about buying a franchise is most accurate?

• A) One of the advantages of buying a franchise is that franchisors are so closely regulated that there is virtually no chance for scams to succeed.
• B) Before purchasing a franchise, the buyer should carefully evaluate the franchise, the franchisor, his or her own situation, and the nature of the market.
• C) Franchise agreements are simple to evaluate, since federal law requires that all such agreements must be written in plain English with all fees and terms clearly explained.
• D) Buying a franchise is the simplest and least expensive way to set up a business, since the franchisor has already worked out all of the details for setting up and running the business.

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Definitions:

Mutual Fund Shares

Units of ownership in a mutual fund, which pools money from many investors to purchase a diversified portfolio of securities.

Corporate Equity

The ownership interest represented by shares of a company's stock.

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health.

Liabilities

Financial obligations or debts owed by a company or individual.