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:

Relationship and Image Costs

Expenses incurred to build and maintain relationships with customers and to enhance the company's image and brand.

Oil-spill Cleanup

The process of removing or mitigating the impact of oil spilled into an environment, typically involving physical, chemical, and biological methods.

Sustainability Report

A report by a company disclosing its environmental, social, and governance (ESG) impacts and sustainability practices.

Private Environmental Costs

Expenses borne by private entities due to environmental protection measures or the impact of their activities on the environment.