Which of the following is true of franchising?
A)It is a form of contract manufacturing.
B)It has grown rapidly in recent years.
C)It is restricted to the market of fast-food restaurants.
D)It requires an export agent and an export broker to be successful.

Question

Quizplus · Accepted Answer

Franchising has grown rapidly in recent years and is no longer restricted to just fast-food restaurants. It is a form of licensing where a franchisor grants a franchisee the right to use its trademark, products, and services for a fee. Franchisees benefit from an established business model and brand recognition, while franchisors benefit from expansion of their brand without having to invest in all the costs and risks associated with opening new locations themselves. Contract manufacturing (A) refers to outsourcing production to a third-party manufacturer, not franchising. Export agents and brokers (D) are not necessary for a successful franchise operation.

Which of the Following Is True of Franchising