Dietizza is a fast-food network that makes low-calorie pizzas. As the firm wishes to expand its operations in different locations, it has licensed a few entrepreneurs to open Dietizza outlets under the company's trademark. The entrepreneurs will take up the responsibility of costs, while Dietizza will assist them in running operations. The company will receive royalty payments and a percentage of profits from the entrepreneurs. Which of the following concepts is illustrated here?
A) Exporting
B) Franchising
C) Wholly owned subsidiary
D) Strategic alliance
E) Joint venture

Question

Quizplus · Accepted Answer

The concept illustrated here is franchising. Dietizza has licensed entrepreneurs to open outlets under the company's trademark, and they will take up the responsibility of costs. Dietizza will only receive royalty payments and a percentage of profits from the entrepreneurs, while also assisting them in running operations. This is a classic example of franchising.

Dietizza Is a Fast-Food Network That Makes Low-Calorie Pizzas