Clinton owns a popular coffee shop in downtown Seattle. Rather than open up a second shop, he allows another business owner to use his company name and follow the same operations. The second business owner, in turn, pays him an initial monthly fee for operational support and the use of the company name. What revenue model does this represent?

Question

Business

Abbie Merritt

12 November, 03:15

Clinton owns a popular coffee shop in downtown Seattle. Rather than open up a second shop, he allows another business owner to use his company name and follow the same operations. The second business owner, in turn, pays him an initial monthly fee for operational support and the use of the company name. What revenue model does this represent?

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Answers (1)

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Gunnar Rivera · Answer 1

Franchising

Explanation:

When the owner of the firm sells the right to use the brand, logo and products to a third party, he is franchising the company.

This model is widespread in the world, and particularly common among retailers and fast-food chains, for example, McDonalds, Subway or 7-Eleven.