Final answer:
A license in business allows an entity to legally operate with a company's products or services. Franchising and exclusive dealing agreements involve paying fees for such rights but vary in terms of competition impact and market fairness.
Step-by-step explanation:
A license is an official agreement granting the legal right to conduct business using the products or services of a company within a specific area. The topic of exclusive rights and franchising falls under the broader category of business practices, where companies can extend their brand and operational model to independent entities willing to invest in the franchise.
In a franchise system, the franchisee pays upfront fees and ongoing royalties for the right to operate under the franchisor's brand and receive support in areas such as training and supply chain management. However, there are also cases where an exclusive dealing agreement, often between a manufacturer and a large retailer, grants an entity the sole right to sell certain products, like televisions or computers. Such agreements can have anticompetitive effects if they excessively limit market competition, contrasting with legal arrangements that aim to encourage dealer competition. It is important that these agreements stay within legal boundaries and do not impose undue restrictions on market entry.