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Exam 16: Small Businesses and Franchapter Ises

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Question 31

Multiple Choice

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Tasty Wings LLC wants to present information in "disclosure documents" via the Internet to prospective franchisees. Among other legal requirements with which the franchisor must comply, prospective franchisees must

A) agree to settle any lawsuits that may arise over the documents.
B) be able to download or save all electronic documents.
C) provide e-mail addresses for Savory Wraps to verify users' authenticity.
D) register with the Federal Trade Commission via Savory Wraps' website.

E) C) and D)
F) A) and D)

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Question 32

Multiple Choice

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Resort Gift Shop is operated as a partnership, with five partners. Shan has a one-third interest in the firm. Each of the other partners has a one-sixth interest. Thieu is the senior partner. With respect to management decisions

A) a majority of the partners must agree.
B) Shan rules.
C) Thieu decides.
D) unanimous consent is required.

E) C) and D)
F) B) and D)

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Question 33

Multiple Choice

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Obie operates Pizza Palace. Obie hires Qua to take and fill customers' orders at an hourly wage of $15.00, plus tips. Obie and Qua are

Ling owns and operates Metro Delivery Service as a sole proprietorship. When she dies, the business will automatically

Anton enters into an agreement with Burgers Inc. to operate a franchise in Centre City. Later, the franchisor grants franchises to others within the same territory, causing Anton to suffer a significant loss in profits. In Anton's suit against the franchisor, his best argument is that Burgers

In a sole proprietorship, the owner is not the business.

Sol and Thom agree to form a partnership to sell real property. To be enforceable, their agreement must be

As a practical matter, trade secrets must not be divulged to a business's key employees.

The Franchise Rule does not require a franchisor to make any disclosures to prospective franchisees but what is disclosed must be material and informative.

Oscar is a partner in Party Caterers. Oscar's death will

When there is no formal, written partnership agreement, an agreement to form a partnership is unenforceable.

Anyone who wishes to do business must first create a separate business organization.

Sean buys a franchise from Taco Mission Inc. This relationship, like all other franchise relationships, is governed by

A single person carrying on a business for profit, with control over its operation, can constitute a partnership.

Vera is one of three partners in Waffles Food Truck. Concerning all aspects of the partnership business, Vera is entitled to information

Because a franchisor's termination of a franchise can adversely affect a franchisee, much franchise litigation involves claims of wrongful termination.

Maeve sells New Energy, a sole proprietorship that makes and sells solar panels, to Olaf. This is

Lazlo owns and operates Market Place, a venue for growers, crafters, and others to sell their goods, without creating a separate business organization. He receives all the profits from the vendors' fees and concession sales. This is most likely

Riki contracts to buy a franchise from Sushi Inc. In this contract, as in most franchise contracts, the determination of the territory to be served is made by

Bhat and Cho do business as Data Security, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as