An ________ refers to an agency that arises when a franchisor creates the image that a franchisee is its agent when in fact an actual agency does not exist.

Question

Quizplus · Accepted Answer

Apparent agency arises when a franchisor creates the image that a franchisee is its agent without actually establishing a legal agency relationship. This occurs when a third party reasonably believes that the franchisee has been authorized to act on behalf of the franchisor, and the franchisor has failed to correct that belief. It is also known as ostensible agency or implied agency. The other options, implicit agency, agency by ratification, and implied agency, refer to different types of actual agency relationships.

An ________ Refers to an Agency That Arises When a Franchisor