Question 1

Any suit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 2

The law considers all new businesses to be sole proprietorships regardless of the number of owners.

Accepted Answer

A) True 
 B)False

Question 3

Laura owns and operates Meditation Center without creating a separate business organization. She receives all the profits from the fees for the classes and the sales of the center's merchandise. This is most likely

Accepted Answer

A)   ​a partnership.
B)   ​a franchise.
C)   ​a sole proprietorship.
D)   ​none of the choices.E) All of the above
F) A) and D)

Question 4

Without creating a separate business organization, Roy starts up Sole Savers, a new, pre-owned auto sales enterprise. Roy is

Accepted Answer

A)   ​none of the choices.
B)   ​a franchisor.
C)   ​a franchisee.
D)   ​a sole proprietor.E) A) and B)
F) A) and C)

Question 5

A sole proprietor pays personal and business income taxes on the business's profits.​

Accepted Answer

A) True 
 B)False

Question 6

The duration of a franchise is determined by federal or state statutes.

Accepted Answer

A) True 
 B)False

Question 7

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her

Accepted Answer

A)   ​annual sales or volume of business.
B)   ​weekly payroll expense.
C)   ​monthly overhead savings.
D)   ​income from unrelated business activities.E) B) and D)
F) A) and B)

Question 8

The day-to-day operation of the franchise business normally is under the control of the franchisor.

Accepted Answer

A) True 
 B)False

Question 9

Restful Inn Motel Corporation wants to terminate its franchise arrangement with Steve's Cabins. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Steve's

Accepted Answer

A)   ​has a reasonable time, with notice.
B)   ​has whatever time Restful Inn determines, with or without notice.
C)   is entitled to notice, but nothing more.​
D)   ​must close immediately.E) None of the above
F) B) and D)

Question 10

The federal government regulates franchising in part through the Franchise Rule.

Accepted Answer

A) True 
 B)False

Question 11

Gary buys from Hook, Line & Sinker Corporation the exclusive right to sell its trademarked fishing gear in a certain area. Their franchise agreement requires Gary to pay certain administrative expenses. Their agreement may also require the franchisee to pay a percentage of the franchisor's

Accepted Answer

A)   ​advertising costs.
B)   ​personal expenses.
C)   ​retirement income.
D)   ​all of the choices.E) A) and B)
F) A) and C)

Question 12

A sole proprietorship offers less flexibility than does a partnership or a corporation.

Accepted Answer

A) True 
 B)False

Exam 36: Small Businesses and Franchises

Laura owns and operates Meditation Center without creating a separate business organization. She receives all the profits from the fees for the classes and the sales of the center's merchandise. This is most likely

Correct Answer
verified

Without creating a separate business organization, Roy starts up Sole Savers, a new, pre-owned auto sales enterprise. Roy is

Correct Answer
verified

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her

Correct Answer
verified

A sole proprietorship offers less flexibility than does a partnership or a corporation.

Correct Answer
verified

Restful Inn Motel Corporation wants to terminate its franchise arrangement with Steve's Cabins. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Steve's

Correct Answer
verified

The duration of a franchise is determined by federal or state statutes.

Correct Answer
verified

Gary buys from Hook, Line & Sinker Corporation the exclusive right to sell its trademarked fishing gear in a certain area. Their franchise agreement requires Gary to pay certain administrative expenses. Their agreement may also require the franchisee to pay a percentage of the franchisor's

Correct Answer
verified

The day-to-day operation of the franchise business normally is under the control of the franchisor.

Correct Answer
verified

A sole proprietor pays personal and business income taxes on the business's profits.

Correct Answer
verified

Any suit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship.

Correct Answer
verified

The law considers all new businesses to be sole proprietorships regardless of the number of owners.

Correct Answer
verified

The federal government regulates franchising in part through the Franchise Rule.

Correct Answer
verified

Exam 36: Small Businesses and Franchises

Laura owns and operates Meditation Center without creating a separate business organization. She receives all the profits from the fees for the classes and the sales of the center's merchandise. This is most likely

Correct AnswerverifiedShow Answer

Without creating a separate business organization, Roy starts up Sole Savers, a new, pre-owned auto sales enterprise. Roy is

Correct AnswerverifiedShow Answer

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her

Correct AnswerverifiedShow Answer

A sole proprietorship offers less flexibility than does a partnership or a corporation.

Correct AnswerverifiedShow Answer

Restful Inn Motel Corporation wants to terminate its franchise arrangement with Steve's Cabins. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Steve's

Correct AnswerverifiedShow Answer

The duration of a franchise is determined by federal or state statutes.

Correct AnswerverifiedShow Answer

Gary buys from Hook, Line & Sinker Corporation the exclusive right to sell its trademarked fishing gear in a certain area. Their franchise agreement requires Gary to pay certain administrative expenses. Their agreement may also require the franchisee to pay a percentage of the franchisor's

Correct AnswerverifiedShow Answer

The day-to-day operation of the franchise business normally is under the control of the franchisor.

Correct AnswerverifiedShow Answer

A sole proprietor pays personal and business income taxes on the business's profits.​

Correct AnswerverifiedShow Answer

Any suit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship.

Correct AnswerverifiedShow Answer

The law considers all new businesses to be sole proprietorships regardless of the number of owners.

Correct AnswerverifiedShow Answer

The federal government regulates franchising in part through the Franchise Rule.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A sole proprietor pays personal and business income taxes on the business's profits.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified