Question

Malory designed a new handbag that is selling well. She started to manufacture them on a large scale and considers her options. She opts for a distributorship franchise under which she will: a. license distributors to sell her handbag. b. pay for one half of the franchisee's startup cost. c. grant a trade name in her authorized dealers.

Answer 1

She opts for a distributorship franchise under which she will license distributors to sell her handbag.

Option: (A)

Explanation:

• The process of granting distributorship of your product to a third-party individual or firm culminates in permitting that particular individual or firm to deal in your products at a fixed margin of profit for the distributor.
• Such licensing only includes the sale of products and not the modification or alteration of the products manufactured by you.