Question

Rita’s offers a contractual business arrangement in various cities around the United States for owners to own and operate. Rita’s locations for a royalty fee to Rita’s and following certain Rita’s restrictions. Rita’s is an example of a(n) __________.

Answer 1

Answer:

Franchise

Explanation:

A franchise is an authority that is given by an organization to someone, allowing them to sell its goods or services or to take part in an activity which the organization controls.  

When Rita's authorizes owners to use its company's name to operate around the United states for a royalty fee and defined business restrictions, Rita's is allowing others operate it's company as a franchise.

Answer 2

Answer: The correct answer is a FRANCHISOR

Explanation: A Franchise is an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities. A Franchise often involves a royalty fee and specified criteria/ restrictions.

Furthermore, a royalty is a payment made the licensee or franchisee to the licensor or franchisor for the right to ongoing use of that asset.