Chapter 4 Vocab Flashcards
(20 cards)
A business model involving a business owner who licenses trademarks and methods to an independent entrepreneur
Franchise
The party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party
Franchisor
An entrepreneur whose power is limited by a contractual relationship with a franchising organization
Franchisee
A franchise agreement granting the right to use a widely recognized product or name
Product and Trade Name Franchising
A franchise agreement whereby the franchise obtains an entire marketing and management system geared to entrepreneurs
Business Format Franchising
The legal agreement between franchisor and franchisee
Franchise Contract
An independent firm or individual acting as a middleman or sales agent with the responsibility of finding new franchisees within a specified territory
Master License
Ownership by a single franchisee of more than one franchise from the same company
Multiple-Unit Ownership
Individuals or firms that obtain the legal right to open several franchised outlets in a given area
Area Developers
The operation of a retail franchise within the physical facilities of a host store
Piggyback Franchising
The operation of several franchise organizations within a single corporate structure
Multibrand Franchising
Bringing two or more franchise brands together under one roof
Co-brangin
Actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee
Churning
The franchisor’s selling of another franchise location within the market area of an existing franchise
Encroachment
A detailed statement that provides the accepted format for satisfying the franchise disclosure requirements of the FTC
Franchise Disclosure Document
Specialized brokers that bring together buyers and sellers of businesses
Business Broker
The exercise of reasonable care in the evaluation of a business opportunity
Due Diligence
An agreement in which the buyer promises the seller that he or she will not reveal confidential information or violate the seller’s trust
Nondisclosure Agreement
The price at which the property would change hands between a willing buyer and a willing seller, with both parties having reasonable knowledge of relevant facts
Fair Market Value
A rule that prescribes that the franchisor must disclose certain information to prospective franchisees
Franchise Rule
