Final Answer:
Licensing obligates a firm to provide its technology, while franchising obligates a firm to provide a specialized sales or service strategy (Option 2).
Step-by-step explanation:
Licensing and franchising are distinct business arrangements, each with specific obligations for the involved parties. Licensing involves granting the rights to use a firm's technology, intellectual property, or brand name. In contrast, franchising entails providing a comprehensive package, including not just the brand but also a specialized sales or service strategy(Option 2). Therefore, in licensing, the emphasis is on the transfer of technology, while in franchising, it extends to a broader set of operational strategies.
Licensing agreements typically involve the licensee paying fees or royalties to the licensor for the use of intellectual property or technology. This arrangement allows the licensee to benefit from the licensor's innovations without the extensive support and control that come with a franchise.
In franchising, the franchisor provides a more comprehensive package, including the use of the brand, operational methods, marketing support, and ongoing assistance. This is a strategic alliance where the franchisee gains access to a proven business model and support, ensuring a standardized approach across different locations.