Final answer:
A franchise agreement is an arrangement wherein an individual purchases the rights to open and operate a business under the franchisor's established brand and systems, typically paying both an upfront fee and ongoing royalties.
Step-by-step explanation:
The answer to the student's question is a franchise agreement. A franchise is a business model where an individual (the franchisee) acquires the rights to open and operate a business using the branding, products, and business model of another company (the franchisor). In a franchise agreement, the franchisee agrees to adhere to the franchisor's business systems and practices and usually pays an upfront franchise fee along with ongoing royalty fees. This agreement allows the franchisee to benefit from the established brand and support system of the franchisor while owning and operating their own business.