Final answer:
The correct answer is option C. Franchising. The scenario described depicts a business relationship known as franchising, where a Canadian clothing company.
Step-by-step explanation:
CottonOn, allows a Chinese firm to use its business model and brand for a fee, differentiating it from offshoring or outsourcing.
The correct answer is option C. Franchising. When an apparel manufacturing company like CottonOn in Canada enters into a business arrangement with a firm in China that allows the Chinese firm to use CottonOn's business model and brand to generate profits, it aligns with the concept of franchising. This implies an agreement where the franchisee (the Chinese firm) is granted the right to operate a business under the franchisor's (CottonOn's) trademark and guidance, typically in exchange for an initial fee and ongoing royalties. It is a common strategy for companies to expand internationally without the need to manage new outlets directly.
Franchising differs from offshoring, where a company relocates its own operations to another country, and outsourcing, where tasks are contracted out to an external firm. In this case, franchising offers benefits such as tapping into local market knowledge while spreading and building the brand internationally.