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For an initial fee plus royalties, Flamingo Inc., a U.S.-based firm, will provide Capside Textiles, a firm based in Ukraine, with training, marketing and advertising assistance, and exclusive rights to conduct Flamingo's business in Ukraine. This form of global business is an example of a _____.

1 Answer

6 votes

Answer:

The correct answer is Franchising.

Step-by-step explanation:

Franchising is a type of contract used in commerce through which a party called a franchisor assigns to another franchisee a license for a commercial exploitation as well as methods, procedures and technology in exchange for periodic payments.

The franchise consists in taking advantage of the experience of an already positioned company that has achieved a remarkable competitive advantage and great recognition in the market. This advantage can consist of a prestigious brand, patented products or methods or, simply, a deep knowledge of the business that makes you aware of the formula to obtain benefits. Through the franchise agreement, the franchisor agrees to transfer part of those securities to the franchisee and he achieves a significant reduction in investment requirements as well as risk, since he works on something that is already known and has had experience.

answered
User Adam Robinson
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