HungryFrank, a small eatery based in the U.S. was reporting losses and wanted to turn its business around. It decided to start using the same name and menu as JoeClub, a popular Italian restaurant, instead if its own. HungryFrank agreed to pay royalty fees to JoeClub to be able to use its menu and name. This form of agreement is an example of _____.
A) direct foreign investment
B) exporting
C) licensing
D) protectionism

Question

Quizplus · Accepted Answer

This is an example of licensing. Licensing is a contractual agreement in which a company allows another company to use its intellectual property (such as trademarks, patents, or technology) for a fee or royalty. In this case, HungryFrank is paying a royalty fee to JoeClub to use its name and menu. This allows HungryFrank to benefit from JoeClub's established brand and offerings without having to develop its own.

HungryFrank, a Small Eatery Based in the U