Which of the Following Is False Regarding Franchises

question 21

Multiple Choice

Which of the following is false regarding franchises?

• A) The franchisor can set sales quotas and record-keeping requirements.
• B) The franchisor has the legal authority to ensure that the franchisee maintains the quality of goods and services associated with the franchise.
• C) The UCC does not apply in the realm of disputes between franchisors and franchisees.
• D) A franchise is a contractual relationship between the franchisor and the franchisee.
• E) If a franchisor exercises too much authority in the day-to-day affairs of the franchisee's business, the franchisor could be held liable for the torts of the franchisee's employees.

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax, a U.S. tax that funds Social Security and Medicare, deducted from employees' paychecks and matched by employers.

Payroll Tax

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Federal Income Tax

A tax levied by the national government on an individual's or corporation's annual income.