Which of the following involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold?
A) franchising
B) exporting
C) licensing
D) foreign direct investment
E) merger

Question

Quizplus · Accepted Answer

Licensing involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold. Franchising also involves granting the right to sell the firm's product, but the franchisor provides significant support and control over the franchisee's operations. Exporting involves selling a firm's product directly to foreign customers, while foreign direct investment involves establishing a physical presence in a foreign market, such as by building a factory or acquiring a local company. A merger involves the combination of two or more companies into a single entity.

Which of the Following Involves Granting a Foreign Entity the Right