Final answer:
Franchising is the business practice where a franchisee pays for the rights to use a franchisor's business model and brand, which includes the obligation of specialized strategies and support in exchange for fees. Choices a and b are examples of government-enforced barriers to entry, while choices C, d, and e represent barriers that are not government-enforced.
Step-by-step explanation:
The correct answer to the student's question is c) Franchising. Franchising obligates a firm to provide a specialized sales or service strategy, support assistance, and often includes an initial investment in exchange for periodic fees. A franchise is a business arrangement where an individual or group (franchisee) purchases the rights to use a company's (franchisor's) business model and brand for a prescribed period of time. In a typical franchise agreement, the franchisee pays an initial start-up fee and ongoing royalty fees to the franchisor. This model is widely used in various sectors, such as the fast-food industry, where companies like McDonald's operate numerous franchised outlets worldwide.
To classify different barriers to entry:
- a. Government-enforced barrier to entry
- b. Government-enforced barrier to entry
- C. Barrier to entry that is not government-enforced
- d. Barrier to entry that is not government-enforced
- e. Barrier to entry that is not government-enforced