CottonOn is an apparel manufacturing company in Canada. It enters into a business arrangement with a firm in China. This arrangement grants the Chinese firm the right to use CottonOn's business model and brand to generate profits. In return, the Chinese firm has to pay a fee to CottonOn. This scenario most likely exemplifies _____.

Question

Quizplus · Accepted Answer

The scenario most likely exemplifies franchising. Franchising involves granting the right to use a company's business model and brand in return for a fee paid by the franchisee. This differs from outsourcing, as outsourcing typically involves contracting out specific tasks or processes to a third-party vendor.

CottonOn Is an Apparel Manufacturing Company in Canada