Question

Flaira, a high-end clothing brand in Florida, signs a licensing agreement with a firm in Honolulu to allow the latter to use Flaira's brand name, trademark, and business methods to operate the same clothing business in Honolulu. In exchange, the Honolulu firm has to pay the owner of Flaira an annual fee. This scenario is an example of a(n) _____.

Answer 1

Answer:

This scenario is an example of a Franchise/Franchising Agreement

Explanation:

Franchising is a method use by well-developed brands to expand, usually without a direct investment. A franchising partner usually makes the investment and pays the original brand owner a fee to use their name, logos, and methods in order to earn a revenue.

One of the most successful examples of franchising are McDonald's and Subway. They only own a minority of their own branches and have expanded around the US and globally with franchising partnerships.