Question

which of the following is a characteristic of a product trade - name franchise:
the franchisee has unlimited liability.
it is owned by shareholders.
it is not open to the public.
the franchisee can choose the name of the business.
question 16
5 pts
kai is the owner of a pizza shop associated with a national chain of pizza restaurants. he established his business in a regional supermarket. the pizza shop is referred to as a
strategic alliance.
piggyback franchise.
host franchise.
master licensee.

Explanation:

• For the first question:
• In a product - trade name franchise, the franchisee (the person running the local business) has unlimited liability. This is because, in many cases, the franchisee is operating as a sole - proprietorship or a general partnership (common in franchise setups) where personal assets can be used to cover business debts.
• A product - trade name franchise is not owned by shareholders (that's more of a corporate structure). Also, it is open to the public as it is a business. And the franchisee cannot choose the name of the business as it is part of a trade - name franchise.
• For the second question:
• A piggyback franchise is a type of franchise where a franchisee operates a franchise within another business establishment. Here, Kai's pizza shop is within a regional supermarket, which is the characteristic of a piggyback franchise.
• A strategic alliance is a partnership between two or more independent businesses for a mutual benefit (not a franchise - like structure). A host franchise is not a standard term in this context. A master licensee has the right to sub - license the franchise in a certain area (not relevant to Kai's situation).

Answer:

• First question: The franchisee has unlimited liability.
• Second question: piggyback franchise.