Which of the Following Should Make a Potential Franchisee Suspicious

question 24

Multiple Choice

Which of the following should make a potential franchisee suspicious about a franchisor's honesty?

• A)Claims that the franchise contract is a standard agreement and that there is no need to read it or have an attorney look it over.
• B)An offer of direct financing of a specific element of the franchise package.
• C)Not providing detailed operational information until 10 days before signing the contract.
• D)Requiring franchisees to spend a certain percentage of profits on advertising.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal circumstances.

Contract

A legally binding agreement between two or more parties that outlines obligations and rights of the parties involved.

Patent

A legal right granted by the government to an inventor, giving them exclusive rights to make, use, or sell their invention for a certain number of years.

Trademark

An emblem, expression, or sequence of words formally protected or naturally sanctioned through employment to identify a business or item.