Which of the following is true of franchises?
A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a retailer assuming ownership of its primary manufacturer through the presence of a channel leader.

Question

Quizplus · Accepted Answer

Franchises involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way. The parent company provides the franchisee with a proven business model and support in areas such as marketing and operations, in exchange for a fee and ongoing royalties.

Which of the Following Is True of Franchises