ABC would like to market their products in Brazil.Armed with the design and manufacturing capability,ABC is looking for a company with the distribution channels and knowledge of the Brazil culture necessary to market their products.ABC has decided to form a partnership with XYZ in Brazil.The company will be jointly owned and independently operated.Which of the following is ABC forming with XYZ?

Question

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ABC is forming a joint venture with XYZ in Brazil, where they will jointly own and operate the company to market ABC's products. A franchise involves licensing the use of a company's trademark and systems in exchange for ongoing royalties and fees, while a licensing agreement involves giving another company the right to use a company's intellectual property in exchange for royalties or fees. An operating subsidiary is a separate legal entity that is wholly owned by another company and operates as a subsidiary in a different country. None of these options fit the scenario as closely as a joint venture.

ABC Would Like to Market Their Products in Brazil