Final answer:
An example of a profit-sharing arrangement between a consumer goods brand and another entity is when a consumer goods brand enters into a licensing agreement with a franchisee.
Step-by-step explanation:
An example of a profit-sharing arrangement between a consumer goods brand and another entity is when a consumer goods brand enters into a licensing agreement with a franchisee. In this arrangement, the consumer goods brand grants the franchisee the right to use its brand name, products, and intellectual property in exchange for a share of the profits generated by the franchisee's operations.
For instance, let's consider a well-known fast food chain like McDonald's. McDonald's allows individuals or companies to become franchisees and operate their own McDonald's restaurants. As part of the agreement, the franchisee pays an initial franchise fee and ongoing royalties to McDonald's. These royalties are usually a percentage of the franchisee's sales. This profit-sharing arrangement allows the consumer goods brand, McDonald's, to benefit financially from the success of its franchisees.
By entering into a profit-sharing arrangement like this, both the consumer goods brand and the franchisee are incentivized to work together and ensure the success of the business. The consumer goods brand benefits from the expansion of its brand and increased sales, while the franchisee benefits from the established brand recognition and support provided by the consumer goods brand.