When the Franchiser Has the Right to Establish a Semi-Independent

question 12

Multiple Choice

When the franchiser has the right to establish a semi-independent organization in a particular territory to recruit, sell, and support other franchises, it is known as a ________ franchise.

• A) multi-unit
• B) cobranding
• C) conversion
• D) master

Understand how decentralized units operate and make decisions within the broader company context.

Understand the concept of gross profit and how it is calculated for different divisions.

Calculate income from operations and understand its significance in business performance evaluation.

Master the concept of service department charges and their impact on divisional profits.

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Definitions:

Default Rules

Default rules are legally established standards that apply when parties to a contract do not stipulate their own arrangements or when such arrangements are not legally enforceable.

LLC

Stands for Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Limited Partnership

A business arrangement where one or more partners are liable only to the extent of their investment, while at least one partner has unlimited liability.

Certificate of Limited Partnership

A legal document filed with a state government to establish the existence of a limited partnership.