Question

Match the following

• A. Licensor
• B. Franchisers
• C. Joint Venture
• D. Re-ecport

Answer 1

* Licensing: It is a contractual arrangement in which one firm grant access to its patents, trade secrets or technology to another firm in a foreign country for a fee called royalty. The firm that grants such permission is called ‘licensor’, and the foreign firm which acquires the rights is called ‘licensee’.
e.g., Suppose you purchase a retail version of Windows 10, then Microsoft is the licensor, and you are the licensee.
*Franchising: It is a unique form of licensing in which a parent company grants another independent entity the right to do business in a manner prescribed by the parent company’. The parent company which grants the permission is called ‘franchisor’, and the independent company which acquires the rights is called ‘franchisee’. E.g. Some famous examples of franchisers are McDonald’s, Pizza Hut and Wal-Mart.
Joint Venture: It means establishing a firm which is jointly owned by two or more independent firms. An example of this is Maruti-Suzuki, India’s largest car manufacturer. Suzuki Motor Corporation, a Japanese company, signed a license and joint venture agreement with Maruti in 1981.
*Entrepot: It refers to import of goods not for consumption in the home country but for exporting them to another country.