Which of the following is false regarding franchises?
A)The franchisee often receives help from the franchisor in starting the franchise.
B)The franchisor has the legal authority to ensure that the franchisee maintains the quality of goods and services associated with the franchise.
C)The franchisor is not liable for torts of the franchisee's employees,regardless of the amount of control exerted by the franchisor.
D)A franchise is a contractual relationship between the franchisor and the franchisee.
E)The Federal Trade Commission has a franchise rule requiring franchisors to present prospective franchisees with the material facts necessary for the franchisee to make an informed decision about entering a franchise relationship.

Question

Quizplus · Accepted Answer

Although the franchisor has the legal authority to ensure that the franchisee maintains the quality of goods and services associated with the franchise,the franchisor must be cautious because if it exercises too much authority in the day-to-day affairs of the business,the franchisor could be held liable for the torts of the franchisee's employees.

Which of the Following Is False Regarding Franchises