Which of the Following Should Make a Potential Franchisee Suspicious

question 11

Multiple Choice

Which of the following should make a potential franchisee suspicious about a franchiser'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

---

Definitions:

Sample Information

Data or facts obtained from a subset of a larger population, used for the purpose of statistical analysis or estimation of parameters of the entire population.

Expected Monetary Value

A statistical technique used in decision-making to calculate the average outcome when the future includes scenarios that may or may not happen.

Expected Payoff

Expected Payoff is a term often used in economics and finance to describe the average outcome of a set of uncertain events, considering each possible outcome and its probability.

Perfect Information

A situation in which all participants have access to all the information needed to make an informed decision.