This expansion method gives others the right to operate businesses with the same name and format. This is called ______

This expansion method gives others the right to operate businesses with the same name and format. This is called ______

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

Answer: (B)

Franchising is the expansion method that lets others operate businesses using the same name, branding, and operating system. The franchisor provides the brand, support, and a proven format, while the franchisee runs individual locations under that system in exchange for fees and royalties. This setup keeps brand consistency across many outlets while enabling rapid growth through independent operators. Licensing, on the other hand, typically covers permission to use a brand or product but not to run an entire business under the same format. A joint venture creates a new company with another party, not a network of independently owned outlets under one brand. Outsourcing involves transferring specific processes to an external provider, not expanding the same business model through multiple operators.

Franchising is the expansion method that lets others operate businesses using the same name, branding, and operating system. The franchisor provides the brand, support, and a proven format, while the franchisee runs individual locations under that system in exchange for fees and royalties. This setup keeps brand consistency across many outlets while enabling rapid growth through independent operators. Licensing, on the other hand, typically covers permission to use a brand or product but not to run an entire business under the same format. A joint venture creates a new company with another party, not a network of independently owned outlets under one brand. Outsourcing involves transferring specific processes to an external provider, not expanding the same business model through multiple operators.