True or false:

1. Some people, uncomfortable with the idea of starting their own business from scratch, would rather join a business with a proven track record through a franchise agreement.

2. A franchise agreement is an arrangement whereby someone with a good idea for a business (the franchisor) sells the rights to use the business name and sell a product or service (the franchise) to others (the franchisees) in a given territory.

3. A franchise can be formed as a sole proprietorship, a partnership, or a corporation.

4. Franchises provide distinct advantages of starting and managing a small business, but there are potential drawbacks as well.

The answers are

1. True

2. False

3. True

4. True

Explanation:

1. Some people, uncomfortable with the idea of starting their own business from scratch, would rather join a business with a proven track record through a franchise agreement.

2. A franchise agreement is an arrangement whereby someone with a good idea for a business (the franchisor) sells the rights to use the business name and sell a product or service (the franchise) to others (the franchisees) in a given territory.

Correction: A franchise agreement is a legally binding document that outlines rights and responsibilities between a franchisee and a franchisor in a franchise business relationship.

3. A franchise can be formed as a sole proprietorship, a partnership, or a corporation.

4. Franchises provide distinct advantages of starting and managing a small business, but there are potential drawbacks as well.