A fast-food franchisee is required by its franchisor to buy unmarked plastic eating utensils from the franchisor if the franchisee wants to use the cups, napkins, and other paper products with the franchise logo. The franchisee can buy the identical utensils from a local supplier for half the price. This requirement would be an example of:

Question

Quizplus · Accepted Answer

This requirement is an example of a tying arrangement, which refers to a situation where a seller requires a buyer to purchase one product or service in order to be able to purchase another product or service. The franchisor is tying the purchase of the logoed paper products to the purchase of the unmarked plastic eating utensils.

A Fast-Food Franchisee Is Required by Its Franchisor to Buy