Which of the Following Data Must a Franchisor Disclose If

question 81

Multiple Choice

Which of the following data must a franchisor disclose if the franchisor makes sales or earnings projections for a potential franchise location that are based on the actual sales, income, or profit figures of an existing franchise?

• A) contract details of the franchisor and the existing franchises
• B) management methods that have been adopted by the existing franchises
• C) the number and percentage of its actual franchises that have obtained such results
• D) any sales or marketing strategy employed by the franchisor in acquiring such results

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Definitions:

Budgeted Costs

Estimated expenses planned in advance for a specific period, often used as targets or benchmarks for actual performance.

Direct Materials Purchase Budget

A budget estimating the raw materials that need to be purchased to meet projected production demands.

Ending Inventories

The final quantity and value of materials, work-in-process, and finished goods that a company holds at the end of an accounting period.

Direct Labor Budget

A projection of the total costs associated with the direct labor needed for a specific period, based on projected levels of production or services.