A _____ between a parent company and the operator of a local outlet specifies each party's duties and the structure of payments that link them, and can turn the combined organization into a stronger competitor.
A)volumetric interdependence
B)franchise contract
C)joint venture
D)buy-sell transaction

Question

Quizplus · Accepted Answer

A franchise agreement is a contract between a parent company (franchisor) and an operator of a local outlet (franchisee), which specifies the terms of the arrangement, including the duties of each party and the payment structure. This allows the combined organization to be a stronger competitor since the franchisee benefits from the established brand and operating system of the franchisor, while the franchisor expands its business through the franchisee's local operations. Volumetric interdependence refers to the degree to which the output of one entity affects the volume of production of another entity, joint venture is a partnership between two or more companies for a specific business venture, and a buy-sell transaction refers to the sale of a company or its assets.

A _____ Between a Parent Company and the Operator of a Local