Final answer:
A joint venture is when two or more independent firms establish a new firm together, sharing ownership, profits, and risks, while maintaining their separate entities.
Step-by-step explanation:
When two or more independent firms establish a new firm together, it is an example of a joint venture. This business strategy allows each participating company to share in the ownership, profits, and risks of the new enterprise. Unlike a wholly owned subsidiary, where one company has complete control, or an acquisition, where one firm is bought by another, a joint venture involves collaboration while maintaining the companies as separate entities. This is different from franchising, where a firm allows another to operate under its brand in exchange for a fee, and from licensing, where a company grants permission to another to use its intellectual property.