Question

When the franchisor provides access to franchise rights rather than transferring control of those rights, what type of arrangement is being made?

1) Licensing agreement
2) Joint venture
3) Merger
4) Acquisition

Answer 1

When the franchisor provides access to franchise rights rather than transferring control of those rights, it is referred to as a licensing agreement(1). The franchisor allows the franchisee to use their brand name, trademarks, and business model in exchange for certain fees or royalties.

Step-by-step explanation:

When the franchisor provides access to franchise rights rather than transferring control of those rights, it is referred to as a licensing agreement(1). In a licensing agreement, the franchisor allows the franchisee to use their brand name, trademarks, and business model in exchange for certain fees or royalties. This arrangement allows the franchisee to benefit from the franchisor's established brand and support while maintaining some control over their own business operations.