What do you call the company that operates under the brand of another company?

What do you call the company that operates under the brand of another company?

• A. Franchisee
• B. Franchisor
• C. Shareholder
• D. Investor

Answer: (A)

A company that operates under the brand of another company is referred to as a franchisee. A franchisee enters into a franchising agreement with the franchisor, which allows them to sell the franchisor's products or services and use their brand name in exchange for certain fees or royalties. This arrangement enables the franchisee to leverage the established reputation and marketing power of the franchisor, thus minimizing some of the risks associated with starting a business from scratch. The franchisee is responsible for managing the day-to-day operations of the franchised business and must adhere to the guidelines and standards set by the franchisor, ensuring consistency across all franchise locations. In contrast, the franchisor is the original company that owns the brand and provides the necessary support and rights to franchisees. Shareholders are individuals or entities that own a share in a corporation, while investors generally provide capital to businesses for ownership stake or return on investment, but do not imply a business operational role like a franchisee.

A company that operates under the brand of another company is referred to as a franchisee. A franchisee enters into a franchising agreement with the franchisor, which allows them to sell the franchisor's products or services and use their brand name in exchange for certain fees or royalties. This arrangement enables the franchisee to leverage the established reputation and marketing power of the franchisor, thus minimizing some of the risks associated with starting a business from scratch. The franchisee is responsible for managing the day-to-day operations of the franchised business and must adhere to the guidelines and standards set by the franchisor, ensuring consistency across all franchise locations.

In contrast, the franchisor is the original company that owns the brand and provides the necessary support and rights to franchisees. Shareholders are individuals or entities that own a share in a corporation, while investors generally provide capital to businesses for ownership stake or return on investment, but do not imply a business operational role like a franchisee.