Maja is negotiating to become a Bread King franchisee with Bread King Inc.Maja is interested in getting a location near her home in Hamilton, Ontario.If Maja becomes a Bread King franchisee, which of the following are TRUE?

Question

Quizplus · Accepted Answer

Most franchise agreements provide that the franchisee is not an agent of the franchisor, in order to limit the franchisor's potential legal liability for the acts of the franchisee. Therefore, it is likely that the franchise agreement between Maja and Bread King will provide that Maja is not an agent of Bread King.

Answer: D
 In general, the franchisor is not liable for the acts of the franchisee in carrying out the franchise business. However, the franchisor may be held liable if it exercises a significant degree of control over the franchisee's operations, such that the franchisee is essentially an agent of the franchisor. This is known as vicarious liability. Therefore, Bread King will not be liable for the acts of Maja as a franchisee, unless it exercises a significant degree of control over her operations.

Maja Is Negotiating to Become a Bread King Franchisee with Bread