Which Statement About Franchising Is Most Likely True

question 21

Multiple Choice

Which statement about franchising is most likely true?

• A) Franchisees provide downstream marketing channel functions for a manufacturer.
• B) Franchisees are company subsidiaries of a vertically integrated manufacturer.
• C) Franchisors assume the identity of franchisees to convey vertical integration.
• D) Franchisors provide downstream marketing channel functions for franchisees.
• E) Franchising first developed in the U.S. after WWII in the soft drink industry.

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Definitions:

Commerce Clause

A provision of the U.S. Constitution (Article I, Section 8, Clause 3) that gives Congress the power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.

Import-Export Clause

A provision in the United States Constitution that prohibits states from imposing taxes or duties on imports and exports, with certain exceptions.

Tax

A mandatory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

Police Power

The capacity of a state to regulate behavior and enforce order within its territory for the betterment of the health, safety, morals, and general welfare of its inhabitants.