Question

Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowed to use the brand name and products of the clothing line after paying a fee to Marty's. They also pay a part of their revenues to Marty's. Marty's is an example of a:

1) Franchise
2) Partnership
3) Corporation
4) Sole Proprietorship

Answer 1

Marty's operates as a franchise where individual outlets pay fees to use the brand and products, and also pay royalty fees from their revenues.

Step-by-step explanation:

Marty's, a clothing company with outlets owned and managed by private individuals who use the brand name and products after paying fees, is an example of a franchise. In a franchise system, the franchisee purchases the rights to start a business based on a model designed by the franchisor, including benefits like training, supply chain support, and help in setting up operations. The franchisee pays an initial franchise fee as well as ongoing royalty fees, which are a portion of their revenues, to the franchisor.

Franchising is a business model where individuals or organizations are allowed to use the brand name and products of a company, after paying a fee and sharing a part of their revenues with the franchisor. In this case, the private individuals who own and manage the Marty's outlets pay a fee to Marty's and use the brand name and products in their outlets.