Which of the following is true of franchises?
A)They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B)They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C)They involve a wholesaler contracting with a number of retailers performing channel functions for them.
D)They involve a retailer assuming ownership of a primary manufacturer through the presence of a channel leader.

Question

Quizplus · Accepted Answer

Franchises involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way. The independent firm, or franchisee, pays a fee and agrees to follow certain rules and guidelines set by the parent company, or franchisor, in exchange for the right to use the brand name and business model.

Which of the Following Is True of Franchises