Question 1

For two years after a partner dissociates from a continuing partnership,the partnership may be bound by the acts of the dissociated partner.

Accepted Answer

According to the Uniform Partnership Act, for two years after a partner dissociates from a partnership, the partnership may still be bound by their acts if those acts were apparently done on behalf of the partnership and within the scope of partnership business.

Question 2

Without creating a separate business organization,Roy starts up Sole Savers,a new,pre-owned auto sales enterprise.Roy is​

Accepted Answer

As per the given information, Roy starts up Sole Savers without creating a separate business organization, which means he is the only owner of the business. Therefore, Roy is a sole proprietor.

Question 3

State deceptive trade practices acts apply to actions by franchisors.

Accepted Answer

Franchisors are considered to be engaged in trade or commerce and are subject to the state deceptive trade practices acts. These laws aim to prevent businesses from engaging in deceptive or unfair business practices, such as misrepresenting the financial performance of the franchise or making false promises to potential franchisees.

Question 4

Some states require the termination of a franchise when there is no "good cause" for it to continue.

Accepted Answer

The answer of Some states require the termination of a...

Question 5

The franchise agreement may specify whether the premises for the business must be leased or purchased outright.

Accepted Answer

The franchise agreement typically outlines whether the franchisee must lease or purchase the premises for the business.

Question 6

Franchise agreements typically limit the franchisee's ability to sell the franchise to another party.

Accepted Answer

Franchise agreements often include provisions that restrict the franchisee's ability to sell or transfer the franchise without the consent of the franchisor. This helps the franchisor maintain control over who operates their brand and ensures that new franchisees meet their standards for ownership.

Question 7

A franchise agreement may allow the franchisee to cure a breach of the franchise agreement within a certain time so as to avoid termination.

Accepted Answer

Many franchise agreements include a provision that allows the franchisee to cure a breach within a certain period of time, typically 30 days, before the franchisor can terminate the agreement. This gives the franchisee an opportunity to correct any issues and avoid losing their business.

Question 8

Lee wants to go into the business of architectural design.Among the reasons that might convince Lee to set up his business as a sole proprietorship would be​

Accepted Answer

Sole proprietorship offers greater organizational flexibility, as the sole owner has full control and decision-making power over the business. Additionally, there is no need for complicated legal formalities or paperwork to set up the business, making it easier and less costly to establish. However, one downside to setting up a sole proprietorship is that the owner bears all the liabilities and debts of the business.

Question 9

The federal government regulates franchising in part through the Franchise Rule.

Accepted Answer

The Franchise Rule, which is enforced by the Federal Trade Commission, sets forth rules and requirements for franchisors to provide potential franchisees with certain disclosures and information to help them make informed decisions about entering into a franchise agreement.

Question 10

Most franchise contracts provide that notice of termination must be given.

Accepted Answer

Most franchise contracts include a provision that requires notice of termination to be given in order to end the agreement.

Question 11

Nina,the owner of Organic Farm,a sole proprietorship,wants to obtain additional capital to operate.This can be accomplished by​

Accepted Answer

Nina, as the owner of a sole proprietorship, can seek additional capital through various means including a bank loan, a Small Business Administration (SBA) loan, or a state grant. Each of these options is available to small businesses looking to expand or sustain their operations.

Question 12

A franchisee is generally economically independent of the franchisor's integrated business system.

Accepted Answer

The answer of A franchisee is generally economically independent of...

Question 13

A franchisor can mandate retail prices for the goods that a franchisee sells.

Accepted Answer

A franchisor typically cannot mandate retail prices due to antitrust laws like the Sherman Act in the United States, which prevent price fixing. However, they can suggest retail prices.

Question 14

On dissolution,the creditors of the individual partners can make claims on the partnership's assets.

Accepted Answer

When a partnership dissolves, the partnership's assets are typically used to pay off its liabilities, including any claims made by creditors of the individual partners. This means that creditors can indeed make claims on the partnership's assets during dissolution.

Question 15

Carl starts up,and assumes the financial risk of,DataWorks,a new Web marketing enterprise.Carl and DataWorks must meet legal requirements relating to​

Accepted Answer

Starting a new business, such as DataWorks, involves meeting various legal requirements. These requirements include registering the business name and obtaining state tax registration (A), obtaining any necessary occupational licenses (B), and complying with intellectual property laws (C). All of these options are necessary legal requirements that Carl and DataWorks must fulfill. Therefore, the correct answer is D.

Question 16

In winding up a general partnership,creditors are paid before partners receive their capital contributions.

Accepted Answer

Creditors have priority over partners in the distribution of assets during the winding up of a general partnership. Therefore, creditors must be paid first before partners can receive their capital contributions.

Question 17

Laura owns and operates Meditation Center without creating a separate business organization.She receives all the profits from the fees for the classes and the sales of the center's merchandise.This is most likely​

Accepted Answer

This business structure meets the definition of a sole proprietorship, where there is one individual who owns and operates the business, and is personally responsible for all the profits and losses. A partnership would involve two or more individuals sharing ownership and profits, and a franchise would involve a business owner licensing the rights to use their brand and operating model to another individual.

Question 18

Typically,the franchisee determines the territory to be served by the franchise.

Accepted Answer

The answer of Typically,the franchisee determines the territory to be...

Question 19

The laws governing franchising are primarily designed to protect franchisors from dishonest franchisees.

Accepted Answer

The laws governing franchising are primarily designed to protect franchisees from dishonest franchisors. These laws also aim to ensure transparency in the franchising process and provide franchisees with certain rights and protections.

Question 20

State regulation of franchising is often aimed at protecting franchisees from unfair practices.

Accepted Answer

State regulations on franchising often include provisions to protect franchisees from unfair practices, such as disclosure requirements before signing a franchise agreement, limits on termination and non-renewal without cause, and restrictions on mandatory purchases from the franchisor. These regulations are intended to balance the power dynamic between franchisors and franchisees and prevent abusive practices that can harm small business owners.

Quiz 16: Small Businesses and Franchises