Which of the Following Is False Regarding Franchises

question 6

Multiple Choice

Which of the following is false regarding franchises?

• A) The franchisee often receives help from the franchisor in starting the franchise.
• 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 franchisor is not liable for torts of the franchisee's employees regardless of the amount of control exerted by the franchisor.
• D) A franchise is a contractual relationship between the franchisor and the franchisee.
• E) The Federal Trade Commission has a franchise rule requiring franchisors to present prospective franchisees with material facts necessary for the franchisee to make an informed decision about entering a franchise relationship.

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Definitions:

Households

Economic entities (of one or more persons occupying a housing unit) that provide resources to the economy and use the income received to purchase goods and services that satisfy economic wants.

Top Quintile

Refers to the highest fifth or 20% segment of a population or group sorted by a particular metric, often used in the context of income distribution.

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, typically aimed at redistributing wealth more equitably.

Value-Added Tax (VAT)

A type of tax that is applied incrementally at each stage of production and distribution on the value added to goods and services.