Chocolate Chips.Molly makes great chocolate chip cookies and sells them.She calls them "Molly's Famous Chocolate Chips." Some of her friends are interested in selling her cookies.They want to use her name and identify the cookies as "Molly's Famous Chocolate Chips." Molly says,however,that she does not have enough time to bake any more cookies.She agrees,for a price,to allow her friends to use her recipe and her name.Suzette,one of Molly's friends who was selling the cookies,was not being sufficiently careful and negligently put a harmful ingredient into the cookie dough resulting in a customer,Fred,becoming ill.Fred threatens to sue both Suzette and Molly.Molly is so exasperated that she cancels all the franchise contracts on the basis of aggravation although the franchise agreements provided that so long as requirements were met,the franchise agreements were good for a period of two years,Molly took the position that the cookies involved a personal service and that she could not be held liable for discontinuation.What type of arrangement did Molly make with her friends?
A)A franchise that was a production-style business operation
B)A franchise that was a distributorship
C)A franchise that was a manufacturing arrangement
D)A franchise that was a manufacturing distributorship
E)A joint venture

Question

Quizplus · Accepted Answer

In a manufacturing arrangement,the franchisor provides the franchisee with a formula or necessary ingredient to manufacture a product.The franchisee then manufactures the product and sells it according to the franchisor's standards.