BUL 4310 Chapter 16 Exam Questions and Answers Fully Solved Latest 2025-2026
Disadvantages of the Sole Proprietorship: Mom and Pop Shop - Answers In a mom and pop shop, the
pop dies and the son takes over in his place. He makes an order with one of the suppliers and the
suppliers raises the rate they charge. The son protests as that's not in the contract- but the supplier's
contract was with the pop, not the son. This action is legally correct.
Formation and Operation: Mo and Larry - Answers Mo and Larry form a partnership. Mo has an idea,
Larry has the money. Mo puts in $10,000. Larry puts in $90,000. They begin their business and are
immediately successful. In comes Curly, and Curly asks to buy the business for a million dollars. Larry
and Mo discuss and agree to sell the business. Mo deposits the check and gives Larry a check for
$500,000, to which Larry protests- he put in $90k, why are they splitting half and half? If the Articles of
Partnership do not say they own the company 90/10, they have equal share.
Formation and Operation: Abel and Baker - Answers Abel and Baker have a partnership. Baker owes
money to Charlie. Baker says he'll just bow out of the partnership and have Charlie replace him so the
money is paid, but this is NOT allowed. Baker can put an arrangement in place that when the
partnership pays him out/profits, Charlie will get paid there (or a charging order, officially.)
Duties and Liabilities of Partners, Fiduciary Duties: Woody and Sam - Answers Woody and Sam are
partners. Norm goes to Sam and offers a business deal. Sam says sure, I'll talk to Woody, but Norm says
nono- just you, I don't want your partner. Sam can't do anything. He can't take the deal on the side, and
he can't leave the partnership to take the deal (wrongful disassociation). If Sam takes the deal and
Woody finds out, the partnership can sue and talk all the money Sam made from that deal.
Franchises: Miami Heat - Answers The Miami Heat is a franchise of the National Basketball Association.
The NBA can direct where they play, what time they play, who they play, how many employees they
must have, a minimum/maximum salary, salary budget, arena security- essentially, they direct the entire
operation. If you own a franchise, you operate your business based on THEIR terms, not yours.
Law Governing Franchising, State Regulation of Franchising: Dairy Queen - Answers An inspector for DQ
enters one in South Florida one day and does not like what he sees. The food looks bad, the store looked
dirty, the counter looked unorganized- the inspector stepped out and called the national office, then
stepped back in and spoke to the owner. He told the owner that this was no longer a Dairy Queen. You
have an hour to cover up the menu board, bring me every cup/plate/napkin with the logo. It doesn't
close them, but they are no longer allowed to function as a DQ. With a valid complaint, this legal action
is allowed.
Law Governing Franchising, State Regulation of Franchising: Holiday Inn - Answers Inspector checks in to
a Holiday Inn and doesn't like what they see. Everything looks awful. Next morning, the inspector talks
to the owner (after calling main office) and, like the DQ, the place is no longer a Holiday Inn.
Laws Governing Franchising: Presale disclosures, McDonald's NYC - Answers McDonald's NYC ends up in
court against McDonald's worldwide. NYC franchise owners said that they could not sell dollar menu
, items, because they'd lose too much money. The judge said that Worldwide could not order their
locations to lose money, which added "dollar menu at participating locations" to the advertising.
The Franchise Contract: Dunkin' - Answers There are Dunkin locations in South Florida who serve café
Cubano, and they are allowed to do that under an agreement, but still have to follow certain rules to
make it. There are also a couple of locations that are vegetarian, and it's still done with permission and
still under rules. Anything done w/o permission is grounds for termination.
Entrepreneur - Answers One who initiates and assumes the financial risk of a new business enterprise
and undertakes to provide or control its management.
Requirements for all business forms - Answers 1. business name registration
2. occupational licensing
3. state tax registration
4. health and environmental permits
5. zoning and building codes
6. import/export regulations
Protecting intellectual property - Answers Ex: Software companies and app developers depend on their
copyrights and patents to protect their investments in the research and development required to create
new programs.
Trademarks - Answers Designs and names, often officially registered with the U.S. Patent and Trademark
Office, by which merchants or manufacturers designate and differentiate their products
Registered marks may use ® while unregistered use ™
Registration should be renewed 5 years after initial registration and at ten year intervals thereafter
Trade Secrets - Answers Information about product development, production processes and techniques,
customer lists, etc
Sole Proprietorship - Answers A business owned by one person; the owner is the business. Owner
reports business income on his/her personal income tax return and is legally responsibly for all debts
and obligations incurred by the business.
Disadvantages of the Sole Proprietorship: Mom and Pop Shop - Answers In a mom and pop shop, the
pop dies and the son takes over in his place. He makes an order with one of the suppliers and the
suppliers raises the rate they charge. The son protests as that's not in the contract- but the supplier's
contract was with the pop, not the son. This action is legally correct.
Formation and Operation: Mo and Larry - Answers Mo and Larry form a partnership. Mo has an idea,
Larry has the money. Mo puts in $10,000. Larry puts in $90,000. They begin their business and are
immediately successful. In comes Curly, and Curly asks to buy the business for a million dollars. Larry
and Mo discuss and agree to sell the business. Mo deposits the check and gives Larry a check for
$500,000, to which Larry protests- he put in $90k, why are they splitting half and half? If the Articles of
Partnership do not say they own the company 90/10, they have equal share.
Formation and Operation: Abel and Baker - Answers Abel and Baker have a partnership. Baker owes
money to Charlie. Baker says he'll just bow out of the partnership and have Charlie replace him so the
money is paid, but this is NOT allowed. Baker can put an arrangement in place that when the
partnership pays him out/profits, Charlie will get paid there (or a charging order, officially.)
Duties and Liabilities of Partners, Fiduciary Duties: Woody and Sam - Answers Woody and Sam are
partners. Norm goes to Sam and offers a business deal. Sam says sure, I'll talk to Woody, but Norm says
nono- just you, I don't want your partner. Sam can't do anything. He can't take the deal on the side, and
he can't leave the partnership to take the deal (wrongful disassociation). If Sam takes the deal and
Woody finds out, the partnership can sue and talk all the money Sam made from that deal.
Franchises: Miami Heat - Answers The Miami Heat is a franchise of the National Basketball Association.
The NBA can direct where they play, what time they play, who they play, how many employees they
must have, a minimum/maximum salary, salary budget, arena security- essentially, they direct the entire
operation. If you own a franchise, you operate your business based on THEIR terms, not yours.
Law Governing Franchising, State Regulation of Franchising: Dairy Queen - Answers An inspector for DQ
enters one in South Florida one day and does not like what he sees. The food looks bad, the store looked
dirty, the counter looked unorganized- the inspector stepped out and called the national office, then
stepped back in and spoke to the owner. He told the owner that this was no longer a Dairy Queen. You
have an hour to cover up the menu board, bring me every cup/plate/napkin with the logo. It doesn't
close them, but they are no longer allowed to function as a DQ. With a valid complaint, this legal action
is allowed.
Law Governing Franchising, State Regulation of Franchising: Holiday Inn - Answers Inspector checks in to
a Holiday Inn and doesn't like what they see. Everything looks awful. Next morning, the inspector talks
to the owner (after calling main office) and, like the DQ, the place is no longer a Holiday Inn.
Laws Governing Franchising: Presale disclosures, McDonald's NYC - Answers McDonald's NYC ends up in
court against McDonald's worldwide. NYC franchise owners said that they could not sell dollar menu
, items, because they'd lose too much money. The judge said that Worldwide could not order their
locations to lose money, which added "dollar menu at participating locations" to the advertising.
The Franchise Contract: Dunkin' - Answers There are Dunkin locations in South Florida who serve café
Cubano, and they are allowed to do that under an agreement, but still have to follow certain rules to
make it. There are also a couple of locations that are vegetarian, and it's still done with permission and
still under rules. Anything done w/o permission is grounds for termination.
Entrepreneur - Answers One who initiates and assumes the financial risk of a new business enterprise
and undertakes to provide or control its management.
Requirements for all business forms - Answers 1. business name registration
2. occupational licensing
3. state tax registration
4. health and environmental permits
5. zoning and building codes
6. import/export regulations
Protecting intellectual property - Answers Ex: Software companies and app developers depend on their
copyrights and patents to protect their investments in the research and development required to create
new programs.
Trademarks - Answers Designs and names, often officially registered with the U.S. Patent and Trademark
Office, by which merchants or manufacturers designate and differentiate their products
Registered marks may use ® while unregistered use ™
Registration should be renewed 5 years after initial registration and at ten year intervals thereafter
Trade Secrets - Answers Information about product development, production processes and techniques,
customer lists, etc
Sole Proprietorship - Answers A business owned by one person; the owner is the business. Owner
reports business income on his/her personal income tax return and is legally responsibly for all debts
and obligations incurred by the business.
