One who initiates and assumes the financial risk of a new business enterprise and undertakes to provide or control its management.
Sole Proprietorship
The simplest form of business organization, in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debs and obligations incurred by the business.
Franchise
Any arrangement in which the owner of a trademark, trade name, or copyright licences another to use that trademark, trade name, or copyright in the selling of goods or services.
Franchisee
One receiving a licence to use another's (the franchisor's) trademark, trade name, or copyright in the sale of goods and services.
Franchisor
One licensing another (the franchisee) to use the owner's trademark, trade name, or copyright in the selling of goods or services.
Distributorship
manufacturing concern (franchisor) licenses a dealer (franchisee) to sell is product.
Chain-Style Business Operation
a franchise operates under a franchisor's trade name and n identified as a member of a select group of dealers that engage in the franchisor's business.
Manufacturing or Processing-Plant Arrangement
the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product. The franchisee then markets the product either at wholesale or at retail in acordance with the franchisor's standards.
In most states a sole proprietorship must file a certficate of propiership.
True or False
False
A franchise is an assosiation, which may or may not be incorporated, that is organized to provide an economic service to its members.
True or False
False
Contract law governs franchise relationships.
True or False
True
If a party to a franchise contract fails to perform, he or she may be subject to a suit for breach of contract.
True or False
True
A contract provision that permits a franchisor to impose quality standards on a franchisee is unenforceable.
True or False
False
A franchisee normally pays a fee for products bought from the franchisor .
True or False
True
A franchisor may suggest retail prices for the goods that a franchisee sells.
True or False
True
The parties to a franchise agreement may determine what constitutes the grounds for the termination of their relationship
True or False
True
The fiduciary ties that bind an agent and a principal also bind partners.
