John and Lena sign a contract with the owner of Little Fairy, a well-known preschool chain, to start a preschool in their city. They take permission from the owner to use the name and products of Little Fairy. They also furnish their preschool in Little Fairy's trademark style. In this scenario, John and Lena are starting a _____.
A) corporation
B) sole proprietorship company
C) limited liability company
D) franchise

Question

Quizplus · Accepted Answer

John and Lena are starting a franchise because they are using the name, products, and trademark style of the Little Fairy preschool chain, which is characteristic of a franchising agreement.

John and Lena Sign a Contract with the Owner of Little