Theoretically, the relationship between a franchisor and a franchisee is one of: ______.
A) parent and subsidiary.
B) an "arm's-length" relationship between two (2) independent contractors.
C) an "arm's-length" relationship between two (2) partners.
D) an "arm's-length" relationship between two (2) joint tenants.

Question

Quizplus · Accepted Answer

The relationship between a franchisor and a franchisee is one of an "arm's-length" relationship between two independent contractors. This means that they are not in a parent-subsidiary relationship, partnership, or joint tenancy. The franchisor provides the franchisee with the right to use its trademark and business system in exchange for fees and royalties, but the franchisee operates their own business and is responsible for its day-to-day operations.

Theoretically, the Relationship Between a Franchisor and a Franchisee Is