Question

Without creating a separate business organization, Reynold starts up and assumes the financial risk of, Sole Savers, a new, pre-owned auto sales enterprise.
Reynold is:

(A) a partner.
(B) a franchisor.
(C) a franchisee.
(D) a sole proprietor.

Answer 1

Answer:

C: a franchisee

Explanation:

One of the responsibilities of a franchisee is to bear risk of the franchisor.

A franchise is a business relationship where a firm goes into agreement with another firm to represent the former in another geographical region or service. The franchisor is the parent company while the franchisee is the independent agent.