Question

Taco Rocket (Scenario)

Imagine that you are the president of Taco Rocket, a new and successful chain of 8 Mexican fast-food restaurants. The success you have experienced in the last 5 years has you thinking of what to do with the business next. Should you expand the business at the current rate? Open new and different restaurants? What?

Q: Recently, Taco Rocket has considered buying a local competitor and the two would combine under the Taco Rocket name. This is an example of...

A. Joint venture

B. Franchise

C. Merger

D. Subsidiary

Answer 1

Taco Rocket's consideration to buy and combine with a local competitor is an example of a merger, which involves the joining of two separate entities into one.

Step-by-step explanation:

When Taco Rocket considers buying a local competitor to combine under the Taco Rocket name, this scenario is categorized as a merger. A merger involves two companies joining together to form one larger entity. Taco Rocket's strategy is different from a franchise, which refers to a chain of businesses using the same brand but individually owned; a joint venture, which is an enterprise undertaken by two or more entities collaborating on a particular project; and a subsidiary, which is a company controlled by another company.