Question

Which of the following statements about franchises are true? (Select all that apply.)

a) Franchises provide limited liability protection.
b) Franchisees have significant independence.
c) Franchisors control branding and operations.
d) Franchise agreements are typically short-term.

Answer 1

Franchises provide limited liability protection, franchisors control branding and operations.

Step-by-step explanation:

Franchises are a business model where individuals purchase the rights to start a business based on a model designed by the franchisor. Regarding the statements:

1. Franchises provide limited liability protection. This statement is true. Franchisees enjoy limited liability protection, which means their personal assets are protected from business liabilities.
2. Franchisees have significant independence. This statement is false. Franchisees have some independence, but they need to follow the franchisor's established guidelines and operations.
3. Franchisors control branding and operations. This statement is true. Franchisors have control over the branding and day-to-day operations of the franchise.
4. Franchise agreements are typically short-term. This statement is false. Franchise agreements are usually long-term contracts that can last for many years.