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To avoid the difficulties involved in starting a business from scratch, Rhea decides to obtain the rights to operate an outlet of a popular spa. This business arrangement requires Rhea to pay an annual fee to the owner of the chain. In this scenario, Rhea is a(n):________

a. Trade creditor.
b. Franchisee.
c. Category captain.
d. Intrapreneur.
e. Venture capitalist.

User Ali Hamad
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Answer: B. Franchisee

Explanation: Rhea is a franchisee. A franchisee is a holder of a franchise; a person who is granted a franchise. In its basic for, Rhea by paying an annual fee to a franchisor (one who grants a franchise, in this case the popular spa) in return, gains the use the spa's trademark, gains the much needed support, system of doing business etc. By gaining these, she is able to avoid the pitfalls that comes with starting a business since the franchisor already has that covered.

User AnasSafi
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