Hats Corp., a firm headquartered in Boston, enters India through a wholly owned subsidiary. It has already franchised a few units to Nepal and China. Which of the following is likely to be true in this case?

Question

Quizplus · Accepted Answer

A wholly owned subsidiary would allow Hats Corp. to have complete control and ownership of its business in India, making it appear more local and integrated into the market. Franchises, on the other hand, would have limited control and ownership over the operations in Nepal and China. Therefore, option C is likely to be true. Option A and D are incorrect because a wholly owned subsidiary typically faces higher risks and trade barriers than a franchise. Option B is also incorrect because a wholly owned subsidiary requires a larger investment than a franchise.

Hats Corp, a Firm Headquartered in Boston, Enters India Through a a Wholly