Entrepreneurship B Final Exam review: Part 1

Front

If you are buying an existing business, you should ask the current owner for important information in written form.

Back

True

Front

Initial franchise fees are usually refundable if the franchise owner later decides to go into another line of business.

Back

False

Front

According to some estimates, as many as 90 percent of all businesses, including the vast majority of small- and medium-sized companies, are owned by families.

Back

True

Front

Antitrust laws make monopolies in certain industries illegal; they also ban other types of business activities that do not promote competition.

Back

True

Front

A legally binding agreement between two or more persons or parties is called a license.

Back

False

Front

At some point, an entrepreneur may have to hire a lawyer to assist with legal issues affecting the business.

Back

True

Front

Which of the following is NOT an advantage to buying an existing business?
- there are prior records of revenues, expenses, and profits, making financial planning easier
- capital is not required because the business already exists
- the seller may be willing to train the new owner
- financial arrangements can be easier

Back

capital is not required because the business already exists

Front

If you are considering buying an existing business, ask the current owner to provide you with a complete financial accounting of operations for at least

Back

the past three years

Front

All of the following information is included in a Franchise Disclosure Document EXCEPT: the franchise fees and royalties, a brief history of the franchise, the terms of the franchise agreement.

Back

the name, address, and phone number of all current franchisees

Front

A franchisee

Back

is dependent on the performance of other franchisees in the chain