A Franchise Agreement May Not Include

question 401

Multiple Choice

A franchise agreement may not include:

• A) restrictions on territorial rights
• B) controls on the use of the trade name or trademarks involved
• C) a fixed payment up front (all payments must be royalties based on sales)
• D) a manual that controls the details of business operations
• E) all of the other choices may be included

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Equity

The residual interest in the assets of a business after deducting its liabilities, representing the ownership interest of shareholders.

Assets

Resources owned by a business or individual that have economic value and can be used to meet debts or commitments.

Liabilities

Financial obligations or debts a company owes to external parties.