Clark_11e-AM-Ch35.doc

Clark_11e-AM-Ch35.doc - CHAPTER 35 SOLE PROPRIETORSHIPS AND...

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277 C HAPTER 35 S OLE P ROPRIETORSHIPS AND F RANCHISES A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES C ASE 35.1—(P AGE 726) W HAT I F THE F ACTS W ERE D IFFERENT ? If Mundelein had identified itself as a residence when ordering the satellite system, how might the result in this case have been different? The result would not likely have been different. Antennas, through Garcia or some other employee, would have installed the system at the restaurant, which, according to the court, was clearly a commercial establishment, The court held the defendant liable because he, through his proprietorship and its employee, allowed the prizefight broadcasts to be available to a commercial establishment without authorization. T HE G LOBAL D IMENSION Because the Internet has made it possible for sole proprietorships to do business worldwide without greatly increasing their costs, should they be considered, for some purposes, the equivalent of other business forms Why or why not? Probably not. Most sole proprietorships remain small: what may constitute large sales for a small one- owner enterprise would be dwarfed by the sales of most associational business forms. Global distribution capabilities cannot convert a sole proprietorship into a corporation with its limited liability and other attributes. And to expand the definition of “corporation” to include sole proprietorships would unrealistically burden the owners in terms of court appearances and in other situations. C ASE 35.2—Q UESTIONS (P AGE 730) 1A. Should a franchisor be allowed to control the operation of its franchisee without liability for the franchisee’s conduct? Explain your answer. No, because there should be some responsibility (liability) assumed for the exercise of control over the franchise’s activities. Yes, because the franchisee should be responsible for its own conduct. 2A. What would constitute the “right to control” under a franchise contract? A franchisor would have a “right to control” if it retained a right to intervene in employee
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278 UNIT EIGHT: BUSINESS ORGANIZATIONS management. “Helpful hints,” “guidelines,” “words of advice,” and similar suggestions or recommendations for addressing problems and disciplining employees would likely not be enough. Whichever party has the discretion to set the terms and conditions of employment would most likely be considered to have a “right to control.” C ASE 35.3—(P AGE 733) W HAT I F THE F ACTS W ERE D IFFERENT ? Suppose that in March 2004, Chic Miller’s had placed one newspaper ad promoting its services and had sold one car. Would the result have been different? No. In fact, after the seven-day closure, Chic Miller’s did place a newspaper ad for “body work business” and sold one car, and cited these facts as evidence that it was open and operating for busi- ness. The court stated, “This evidence vastly is insufficient to show the conduct of regular, customary sales and service operations, which is a material part of the franchise
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This note was uploaded on 10/11/2010 for the course MGT 301 taught by Professor Pederson during the Fall '10 term at SUNY Stony Brook.

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Clark_11e-AM-Ch35.doc - CHAPTER 35 SOLE PROPRIETORSHIPS AND...

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