stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Entrepreneurship Chapter 7 Flashcards | StudBud
Explore
/
Entrepreneurship Chapter 7
Entrepreneurship Chapter 7
25 terms
·
StudBud Administration
·
293 plays
#entrepreneurship
Flashcards
25 cards
F
Practice quiz
P
Host live
L
Questions
25
Answers
1
Paid to the franchise company to support advertising as a whole.
royalty fees
advertising fees
all of these
initial franchise fee
2
The FTC requires franchisors to give potential franchisees a FDD 14 days in advance of sale.
False
True
3
Income earned by a sole proprietor is taxed twice: as a company and as an individual.
False
True
4
Fees that the franchisee must pay to the franchisor
advertising fees
initial franchise fee
all of these
royalty fees
5
Initial franchise fees are usually refundable if you decide to change your line of business.
True
False
6
Franchise ownership is declining in the United States.
True
False
7
When buying an existing business, how many years of financial records should you request?
2 years
3 years
5 years
1 year
8
Local governments control the types of buildings that can be built through use of
trademarks
copyrights
licenses
zoning regulations
9
Which of the following is NOT an advantage to buying an existing business?
financial arrangements can be easier
capital is not required for a new business
the seller may be willing to train the new owner
there are prior records for financial planning
10
Franchisors often help buyers with marketing, merchandising, and site selection.
True
False
11
A corporation's board of directors is responsible for all of the following EXCEPT
determining the salaries of the executives
electing the corporation's officers
day to day management of the corporation
determining the amount of dividends
12
It is generally easier to start a new business than to buy an existing business.
False
True
13
A legal agreement that gives an individual the right to market a companies products
none of these
franchise
franchisee
franchisor
14
A unit of ownership in a corporation is called a
bond
share of stock
certificate of deposit
dividend
15
A business owned exclusively by one person is called a
sole proprietorship
corporation
partnership
limited liability company
16
The amount the local franchise owner pays in return for the right to run the franchise
initial franchise fee
all of these
advertising fees
royalty fees
17
A legally binding agreement between two or more persons or parties is called a license.
True
False
18
The MAIN reason entrepreneurs set up corporations is because
they are more prestigious than other forms of ownership
ease of raising money
liability is limited to the amount invested by shareholders
they are the easiest and least expensive form of ownership
19
If you are buying an existing business, you should ask the owner for information in writing.
False
True
20
All of the following information is included in a Franchise Disclosure Document EXCEPT:
the franchise fees and royalties
the terms of the franchise agreement
contact information for customers
a brief history of the franchise
21
A franchisee
can change recipes
is dependent on the performance of other franchisees
can never have the franchise contract terminated
has more freedom to make decisions than other entrepreneurs
22
The FBI monitors activities such as false advertising and price setting by competitors.
False
True
23
Weekly or monthly payments made by the local owner to the franchise company
all of these
royalty fees
initial franchise fee
advertising fees
24
This law protects small businesses from unfair pricing practices.
Clayton Act
Sherman Act
Wheeler-Lea Act
Robinson-Patman Act
25
The copyright on a book remains in effect until the author dies.
False
True
