True/False
Indicate whether the sentence or statement is true
or false.
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1.
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In a
sole proprietorship, the owner takes all of the profits.
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2.
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In
most states, a sole proprietorship must file a certificate of proprietorship.
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3.
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In a
sole proprietorship, the owner receives all of the risk.
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4.
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A
sole proprietorship is a separate legal entity for tax purposes.
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5.
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A
franchise is an association, which may or may not be incorporated, that is organized to provide an
economic service to its members.
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6.
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A
franchise is a form of business organization.
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7.
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A
manufacturer's license to an outside dealer to sell a product creates a chain-style
franchise.
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8.
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Most
fast-food chains are a chain-style franchises.
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9.
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An
owner's license of a formula to make a certain product to an outside party is a
franchise.
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10.
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An
owner's license of the ingredients of a certain product to an outside party is not a
franchise.
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11.
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A
state deceptive trade practice statute may limit the actions of franchisors.
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12.
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If a
party to a franchise contract fails to perform, he or she may be subject to a suit for breach of
contract.
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13.
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Franchisees ordinarily pay no fee for a franchise license.
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14.
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Under
no circumstances may a franchisor establish an additional franchise in a territory allotted to a
franchisee.
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15.
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A
franchisor cannot impose quality standards on a franchisee.
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16.
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In
some circumstances, a franchisor may be liable for the act of a franchisee's employee.
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17.
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Franchisors that set the prices at which franchisees resell their products may violate
antitrust laws.
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18.
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State
law determines the duration of a franchise.
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19.
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In a
franchise, a franchisee owns the business.
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20.
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The
parties to a franchise agreement may determine what constitutes the grounds for the termination of
their relationship.
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