B#9 Businesses

Benchmark 4-B:

analyze and evaluate how economic systems impact the way individuals, households, businesses, governments and societies make decisions about resources and the production and distribution of goods and services:

#9 Standards with Test Item Specifications:

Explain how businesses (e.g., sole proprietorships, partnerships, corporations, franchises) are organized and financed in the United States economy;

Sample Question:

Read the terms and definitions provided by the International Franchising Association (IFA) and answer the question that follows.

●Franchising: A method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.

●Franchisor: The person or company that grants the franchisee the right to do business under their trademark or trade name.

●Royalty: The regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee’s gross sales.

●Trademark: The marks, brand name and logo that identify a franchisor which is licensed to the franchisee.

Source: http://franchise.org/what-are-common-franchise-terms

Based on the terminology presented by the IFA, which statement is supported by the evidence in the definitions?

A. The franchisor will likely end up making payments to the franchisee.

B. The franchisee will receive free supplies and uniforms from the franchisor.

C. The franchisor will likely oversee how the franchisee conducts marketing and business. *

D. The franchisee will be able to use a logo and trademark independent from the franchisor.