Business Studies

Compared to licensing, franchising is a more advantageous mode of entry because _______.


ANSWER

all of the above


SOLUTION
  • Licensing is a contractual arrangement in which one firm grants access to its patents, trade secrets or technology to another firm in a foreign country for a fee called royalty.
  • Franchising is a business concept in which franchiser provides permission to the third party i.e. franchisee to sell its products. Here, franchisee has a low risk, greater control and low cost and franchiser gets economies of scale.
  • As compared to joint ventures and wholly owned subsidiaries, licensing/ franchising is relatively a much easier mode of entering into foreign markets with proven product/technology without much business risks and investments
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Single Correct Medium Published on 18th 08, 2020
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