A Franchisor Would Most Likely Punish a Franchisee for a Contract

question 23

Multiple Choice

A franchisor would most likely punish a franchisee for a contract violation when _________.

• A) the franchisee runs a shabby facility in a highly visible location
• B) the franchisee is part of a dense, tightly knit network of franchisees
• C) strong relational governance allows the system to operate on norms of solidarity
• D) the franchisor has invested significantly in the franchisee that has made the violation
• E) performance ambiguity prevents the franchisor from clearly identifying the enforcement situation

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Definitions:

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.

U.S. Constitution

The foundational document that outlines the framework of the federal government of the United States, including its institutions and the rights of citizens.