Question

Kerry owns a fast food business that he operates for a profit. While working in the business one afternoon, an individual entered and identified himself as an inspector and asked permission to inspect the premises to ensure that they were in good, clean, and sanitary conditions. Kerry permitted him to inspect. The individual was not from any government agency. What is the most likely explanation for Kerry’s actions?

Answer 1

Options:

A. Kerry has hired a private inspector to ensure that the business is in compliance with government regulations.

B. The business is being sold and the buyer has sent an inspector to ensure the business is operated properly.

C. This is a franchise and the franchisor has sent its inspector to ensure the business is operated according to the franchise license.

D. The inspector is the father of an employee who is a minor and he wants to ensure that child labor laws will not be violated.

Answer: C.) This is a franchise and the franchisor has sent its inspector to ensure the business is operated according to the franchise license

Explanation:

The fast food business being operated by Kerry could be interpreted as a franchise, whereby a franchisor which could be an individual or company has granted Kerry who is a third party owner the license or right to use the franchisor's trademarks and right to run her business. These franchisor must have sent an inspector to Kerry's fast food to inspect in other to ascertain that the franchise is being operated in accordance to the terms in the franchise license.