Silver Weave Inc., an apparel company, operates through a business model in which individuals can buy the rights to set up Silver Weave stores and sell the company's merchandise in return for a lump sum fee at the beginning of the contract and a percentage of revenues every month.The owners of the stores have to stock the collection approved from the company's headquarters and also maintain consistent customer service as expected in its flagship store.Which of the following alternatives to integration does this best illustrate?
A) Crowdsourcing
B) Credit Rationing
C) Franchising
D) Bootstrapping

Question

Quizplus · Accepted Answer

This scenario best illustrates franchising. Franchising is a long-term contract in which a franchisor grants a franchisee the right to use the franchisor's trademark and business processes to offer goods and services that carry the franchisor's brand name; the franchisee in turn pays an up-front buy-in lump sum and a percentage of revenues.