Hot Potatoes, a fast food restaurant, operates through a business model in which individuals can buy the rights to set up Hot Potatoes stores and sell the company’s food in return for a lump sum fee at the beginning of the contract and a percentage of revenues every month. The owners of the stores have to offer a menu approved by the company’s headquarters and also maintain consistent customer service as expected in its flagship store. Which of the following alternatives to integration does this best illustrate?
A. credit rationing B. crowdsourcing C. bootstrapping D. franchising
D is right option
Franchising is defined as a method of doing business wherein a
franchisor licenses trademarks and tried and proven methods of
doing business to a franchisee in exchange for a payment
it is a business relationship in which the franchisor (the owner of
the business providing the product or service) assigns to
independent people (the franchisees) the right to market and
distribute the franchisor's goods or service, and to use the
business name for a fixed period of time.
D is right option
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