Which statement defines a franchise?

• A. A business run by one firm under the name of another.
• B. A company that refuses to license its brand.
• C. A government-funded venture.
• D. A non-profit organization.

Answer: (A)

Franchising is a business arrangement where a franchisor licenses its brand, business model, and operating system to a franchisee, who runs a business using that established name and system. The key idea is that the franchisee operates under the brand of another firm while following its proven methods, receiving support and ongoing guidance in exchange for fees. The statement describes exactly this setup: a business run by one firm under the name of another. The other options don’t fit because they describe situations outside franchising—refusing to license a brand, a government-funded venture, or a non-profit organization.