For initial fee plus royalties, Inding Inc., a U.S.-based firm, will provide Caliste Works, a firm based in Singapore, with an exclusive right to conduct Inding's business in its country. This form of global business is an example of a _____.
A) wholly owned affiliate
B) conglomerate
C) franchise
D) joint venture

Question

Quizplus · Accepted Answer

This scenario describes a franchise agreement where one company (Inding Inc.) grants another company (Caliste Works) the exclusive right to use its business model and trademarks in a specific geographic area (Singapore) for an initial fee and ongoing royalties. Wholly owned affiliates involve a company setting up and operating its own subsidiary in a foreign market, while conglomerates involve unrelated businesses under one corporate umbrella. Joint ventures involve two or more companies sharing ownership and control of a new venture.

For Initial Fee Plus Royalties, Inding Inc