Which of the following is an example of franchising?
A)An Italian clothing company opens manufacturing factories in China and Bangladesh to reduce manufacturing costs.
B)A U.S-based quick-service restaurant gives rights to another business to use its entire business system in exchange for compensation and royalties.
C)A U.S.-based animation company allows factories in China to use their famous cartoon character on mugs and stationery.
D)A Germany automobile manufacturer opens an office in Philippines for its customer care operations.

Question

Quizplus · Accepted Answer

Franchising involves giving another business the rights to use a company's entire business system, including its trademark, name, and operating procedures, in exchange for royalties and compensation. This is exactly what is happening in option B, where a U.S.-based quick-service restaurant is giving rights to another business to use its entire business system. The other options do not involve franchising, as they describe manufacturing operations, licensing agreements, and customer care operations, respectively.

Which of the Following Is an Example of Franchising