Which term describes a franchise arrangement where independent owners operate outlets under the parent company's trade name?

• A. Franchise
• B. Business Franchise
• C. Sole Partnership
• D. Partnership

Answer: (B)

At the heart of this idea is a licensing-style business model where independent operators run outlets using the parent company’s trade name, brand, and operating system. The franchisor provides the proven business system, brand standards, and support, and in return the franchisee pays fees and royalties to operate under that name. This makes it a business franchise—a setup built around scalable, branded outlets owned by separate individuals who follow the same guidelines to keep the customer experience consistent.

Why the other options don’t fit: a sole partnership or partnership implies that the owners share ownership, profits, and liability in a single business entity, rather than many independent outlets operating under one brand. The essence here is the brand licensing and standardized system across multiple independent owners, which is the hallmark of a franchise.