Franchising is essentially the service-industry version of licensing,

QUESTION

Franchising is essentially the service-industry version of licensing, although it normally involves much longer-term commitments than licensing.

Indicate whether the statement is true or false.

ANSWER

TRUE
Franchising is essentially the service-industry version of licensing, although it normally involves much longer-term commitments than licensing. With franchising, the firm licenses its brand name to a foreign firm in return for a percentage of the franchisee’s profits. The franchising contract specifies the conditions that the franchisee must fulfill if it is to use the franchisor’s brand name.