10
QuizMultiple Choice

Business Structures

Question 10 • IL-Economics

Entrepreneurs who want to open a franchise

Answer
b
buys the rights from the parent company and creates his or her own rules.
b
buy the rights from the parent company and invest in a location approved by the parent company.
i
invest in a location and create a business model for the franchise.
i
invest in a location and develop a trademark for the franchise.

Explanation

A franchisee buys the right to operate using the parent company’s name and business system. The franchisee typically invests in a location that the parent company approves and follows its established rules, rather than creating independent rules, a business model, or a trademark. Therefore, choice B is correct.

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