Franchising is a form of direct investment.

Question

Quizplus · Accepted Answer

Franchising is not considered a form of direct investment; rather, it is a business strategy for expanding a company where the franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. In contrast, direct investment refers to a domestic firm actually investing in and owning a foreign subsidiary or company.

Franchising Is a Form of Direct Investment