Raj loves cars. He wants to buy a product-distribution franchise in th

QUESTION

Raj loves cars. He wants to buy a product-distribution franchise in the automotive industry. Which company should he purchase?

A) a car rental company in which Raj pays for the rights to use a company’s name
B) a car sales showroom in which Raj sells cars previously bought and sold
C) a car repair shop in which Raj pays for the rights to use a company’s name and sell its parts
D) a car sales showroom in which Raj sells cars made and trademarked by a separate manufacturer
E) a car manufacturing company in which Raj makes and sells cars according to guidelines put out by the franchisor.

ANSWER

Answer: D
Explanation: D) A product-distribution franchise is a company in which a franchisee is given the right to sell trademarked products purchased from the franchisor.