Company X,a franchisor,used franchisees to build the Company X brand and the company system.Now that Company X is large and successful,it is using pricing tactics and restrictive contract terms to force franchisees to sell their franchises back to Company X.Which term best describes the actions of Company X?
A) free riding
B) negligent franchising
C) opportunistic licensing
D) redirection of ownership
E) organizational consolidation

Question

Quizplus · Accepted Answer

Company X is using its power as a franchisor to force franchisees to sell their franchises back to the company. This is an example of redirection of ownership, which is when a franchisor uses its power to force franchisees to sell their franchises back to the company.

Company X,a Franchisor,used Franchisees to Build the Company X Brand