1. David L. operates his business as a sole proprietorship.Which is a correct statement about David's business model:

a.David maintains his business as an entity.

b.David's liability is limited to the capital he invested in the entity.

c.David must adhere to strict formalities to maintain 'separateness'.

d.None of the above.

2. Flip Gymnastics grants a franchise to Krystian to operate a Flip gym. Which of the following would not be a key provision in the franchise agreement between Flip and Krystian?

a.Location of gym and protected area.

b.Initial purchase fee and ongoing royalty percentage.

c.License to use Flip's System and IP.

d.None of the above.

3.Which of the following statements is not correct about a franchise relationship

a.The franchisee is licensed to use franchisor's proprietary system and trademarks.

b.The franchise agreement typically restricts the franchisee to a specific location.

c.The franchisee acquires a proportionate ownership interest in the franchisor's IP.

d.The franchisee pays an initial fee or lump-sum price for the franchise license.