What is the term for a business model where a franchiser allows another operator to trade under their name?

• A. Franchise
• B. Lifestyle business
• C. Online business
• D. Mutual organisation

Answer: (A)

Franchising is a business model where a franchiser grants another operator the right to trade under their name, using their brand, products, and operating systems. The franchisee pays an upfront fee and ongoing royalties and receives training, marketing support, and a proven business format. This setup lets the franchiser expand quickly with less capital while the franchisee benefits from brand recognition and a tested system. The other options don’t fit this arrangement: a lifestyle business is centered on the owner’s lifestyle goals rather than expanding under someone else’s brand; an online business describes how sales are made rather than a brand-sharing model; a mutual organisation is member-owned and operates on different principles.