Other than licensing,the form of foreign market entry that results in a firm in the host country paying a royalty to the firm that has the rights to a product or service is called _____________.
A) joint venture
B) exporting
C) franchising
D) wholly owned subsidiary
E) merger

Question

Quizplus · Accepted Answer

The form of foreign market entry described in the question is franchising, where a company grants another company the right to use its trademark, products or services, and operational methods in return for a fee or royalty. This allows the franchisor to expand its brand and product/service offerings in the foreign market without incurring the costs associated with owning and operating a business there. The franchisee benefits from the established brand and business model of the franchisor, reducing their risk of failure in a new market. Joint venture, exporting, wholly owned subsidiary, and merger do not involve a royalty payment from a host country firm.

Other Than Licensing,the Form of Foreign Market Entry That Results