Franchisee Complaints vs Franchisor Problems
Although many franchisees have been very successful, some have quickly lost their life savings. Of course, there are risks in any business; not all of McDonald’s franchises have been profitable. However, some franchisors have grossly misrepresented the opportunities for success of their franchisees and the assistance that the franchisor will actually provide. Most franchise contracts are typical “ contracts of adhesion ”. Some contain terms that may bring hardship to franchisees that are acting in good faith and performing reasonably well under the contract. Termination clauses frequently give broad discretion to the franchisor. The term of the contract may be short – only a year for the typical service station contract – with no assurance of the right to renew or to transfer a going business to another person. Some contracts even prohibit franchisees from joining franchisee associations. In an attempt to control distribution to maximize its profits and perhaps those of its franchisees, the franchisor runs the risk of violating federal and state antitrust laws. Attempts to require franchisees to buy products, equipment, and supplies exclusively from the franchisor may violate the prohibition in the Clayton Act against tie-in sales (John Middleton Clayton – U.S. lawyer and statesman. The Clayton Antitrust Act of 1914, was enacted in the United Statesto add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices considered harmful to consumers (monopolies, cartels, and trusts). The Clayton Act specified particular prohibited conduct, the three-level enforcement scheme, the exemptions, and the remedial measures.). Attempts to require adherence to prices set by the franchisor and prohibitions against sales to customers outside an assigned sales territory may violate the Sherman Act (John Sherman – U.S. statesman). Franchise contracts usually declare that the franchisee is an independent contractor and is not an agent or employee of the franchisor. However, in an effort to maintain the quality of the product or service offered by the franchisee, and thus the value of its trademark, the franchisor often exerts considerable control over many aspects of the franchisee’s operations. This control has been sufficient in many cases to cause courts to hold that the franchisee is not an independent contractor. Although insurance can cover this risk in most cases, lawsuits against the franchisor can be damaging to reputation as well as time-consuming for the franchisor’s executives. 4.3. Language Practice:
4.3.1. Please give the English variants of the following Ukrainian words and word-combinations: компанія/корпорація, спільне підприємство, материнська (холдингова) компанія, дочірня компанія (філія), започатковувати власну справу (син. ряд), отримати прибуток, постачати, бути прийнятим на роботу/звільненим з роботи, відповідальний, корпоративне право, франчайзинг (концесійна діяльність), позов, індивідуальна підприємницька діяльність, позика, оклад/заробітна плата, вести (справи), здавати/брати в оренду, подавати (річні звіти), корпоративний/єдиний (податок), компанія з (не)обмеженою відповідальністю, витрати, адвокат вищого/нижчого рангу, додаткові пільги (окрім заробітної плати), некомерційне (що не ставить метою отримувати прибуток) підприємство, угода про приєднання (злиття), продаж за умови примусової купівлі, рахунок прибутків і витрат, торговельна точка (підприємство роздрібної торгівлі), бухгалтер, податкова ставка, акціонер, об’єднувати (власність), ліквідувати власну справу (син. ряд), акція (як різновид цінних паперів), подавати позов (порушувати справу проти когось), який підлягає відрахуванню (вирахуванню), підтримувати, розподіляти девіденти, підприємець/підприємництво. 4.3.2. Please translate the following sentences into Ukrainian: 1. A business (also known as enterprise or firm) is an organization established to provide goods and services or both to consumers. Businesses are predominant in the economy in which most of them are privately owned and formed to earn profit to increase the wealth of their owners. Businesses may also form not-for-profit or be state-owned. 2. Corporate law (also company or corporations law) is the law of the most dominant kind of business enterprise in the modern world. Corporate law is the study of how shareholders, directors, employees, creditors and other stakeholders such as consumers, the community and the environment interact with one another under the internal rules of the firm. 3. A business enterprise can be owned and organized in several forms. Each form of organization has its own merits and demerits. The ultimate choice of the form of business depends upon the balancing of the advantages and disadvantages of the various forms of business. The right choice of the form of the business is very crucial because it determines the power, control, risk and responsibility of the entrepreneur as well as the division of profits and losses. 4. A cooperative (shortly co-op) is a limited liability business that can organize for-profit or not-for-profit. A for-profit cooperative differs from a for-profit corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. 5. Sole proprietors are unincorporated businesses. They are also called independent contractors (підрядчики), consultants or freelancers (позаштатні співробітники). There are no forms you need to fill out to start this type of business. The only thing you need to do is report your business income and expenses. This is the easiest form of business to set up and the easiest to dissolve. 6. S-Corporations have features similar to a partnership. An S-Corporation must have at least one shareholder and cannot have more than 100 shareholders. If any shareholder provides services to the business, the S-Corporation must pay that shareholder a reasonable salary. This salary is a separate payment from distributions of profits or losses. 7. Trusts are usually formed upon the death of an individual and are designed to provide continuity of the investments and business activities of the deceased individual.
4.3.3. Match the term with its definition:
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