Question

5. Al also suggested another way Jenna could finance her expansion. He described setting-up a chain of AutoMotion Garages by selling the rights to use AutoMotion's name, business model, garage design and service ideas to others who would like to own a similar shop. These individuals would pay AutoMotion an initial fee and monthly royalties based on earnings. Al is suggesting that Jenna set up a: Group of answer choices A. Joint venture. B. Franchise arrangement. C. C corporation. D. Master limited partnership.

Answer 1

B. Franchise arrangement.

Step-by-step explanation:

Franchising is a business model that markets the right to use a trademark, patent, infrastructure, know-how and distribution right.

It consists in granting the right of use provided by a brand owner (franchisor) to an investor (franchisee) so that he can replicate a recognized and successful format for market exploitation in different locations.

This business can be a brand, a service, a product or even a concept. Franchises cover several market segments and their main characteristic is the standardization of processes and products.