Franchising Is a Form of Licensing in Which a Company

question 132

True/False

Franchising is a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services.

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Definitions:

Principal-Agent Problem

A dilemma in economics occurring when one party (the agent) is able to make decisions and/or take actions on behalf of, or that impact, another party (the principal).

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.

Residual Claimants

Individuals or entities entitled to a share of a company's profits after all obligations have been met.

Team Production

A production process in which employees work together under the supervision of the owner or the owner’s representative.