Which term describes the practice of granting rights to use a brand and business model across locations?

Which term describes the practice of granting rights to use a brand and business model across locations?

• A. Licensing
• B. Outsourcing
• C. Franchising
• D. Joint venture

Answer: (C)

Franchising is the practice of granting the rights to use a brand and a proven business model across multiple locations. In franchising, the franchisor provides the brand, operating system, training, and ongoing support, and the franchisee operates under those standards in exchange for fees and royalties. This setup enables consistent branding and operations across many sites. Licensing, by contrast, is mainly about permission to use intellectual property like a logo or patent without the full business system or ongoing support. Outsourcing means contracting out specific tasks to another company, not expanding a network of branded outlets. A joint venture involves creating a new company with another party and sharing ownership. The description in the question—rights to use a brand and business model across locations—matches franchising most closely.

Franchising is the practice of granting the rights to use a brand and a proven business model across multiple locations. In franchising, the franchisor provides the brand, operating system, training, and ongoing support, and the franchisee operates under those standards in exchange for fees and royalties. This setup enables consistent branding and operations across many sites.

Licensing, by contrast, is mainly about permission to use intellectual property like a logo or patent without the full business system or ongoing support. Outsourcing means contracting out specific tasks to another company, not expanding a network of branded outlets. A joint venture involves creating a new company with another party and sharing ownership. The description in the question—rights to use a brand and business model across locations—matches franchising most closely.