GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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where a business is owned by shareholders
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where a business sells the rights to distribute its products under its name to other individuals or businesses
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where a business sells its products to other businesses
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where businesses merge to create one big business
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Detailed explanation-1: -A franchise is a joint venture between a franchisor and a franchisee. The franchisor is the original business. It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor’s goods or services under an existing business model and trademark.
Detailed explanation-2: -The franchisee holds the right to the franchisor’s loyalty, good faith and fair dealing, and due care in the performance of the franchisor’s duties. The franchisee is also entitled to impose reasonable restraints upon the franchisor’s ability to require changes within the franchise system.
Detailed explanation-3: -A distribution franchise is a contract in which a franchisor gives the franchisee the right to distribute or sell a specific product on its behalf. Under this arrangement, the franchisee becomes the exclusive or semi-exclusive distributor of the franchisor’s product.
Detailed explanation-4: -Franchising, or a business franchise model, is a contractual business model or relationship whereby an established brand, known as the ‘franchisor, ‘ allows an independent business owner, or franchisee, to use its branding, business model, and other intellectual property.
Detailed explanation-5: -Product Distribution Franchise: A supplier-dealer relationship, product distribution franchises simply sell the products of the franchisor in their area of operation. The franchisor usually only licenses their trademark and logo but does not provide the whole system of running the business.