Cajun Chicken, a Growing Franchise Chain Based in Lafayette, Louisiana

question 74

Multiple Choice

Cajun Chicken, a growing franchise chain based in Lafayette, Louisiana, has expanded to 185 locations in the United States. Because they realize that domestic growth is limited, the owners are contemplating expansion to selected foreign countries. Thus far, research has shown that the rights to use many of the firm’s recipes can be sold to other restaurants, cafeterias, and food stores. Cajun can also sell prepackaged food products, complete with spices, to other markets. At this point, whether to start by opening company-owned outlets or selling franchises is still a toss up. In any case, the long-term picture looks good.
-In selling recipe rights to buyers in foreign markets,Cajun would be engaged in _____.

• A)licensing
• B)franchising
• C)exporting
• D)outsourcing

---

Definitions:

Capital Lease

A lease agreement that designates the lessee (the party leasing the asset) as the owner for accounting purposes, and it generally spans a significant portion of the asset's life.