What type of business allows a company to use an existing brand name and products/services?

• A. Startup
• B. Franchise
• C. Co-operative
• D. Corporation

Answer: (B)

A franchise allows a company to use an existing brand name and offer established products or services, which is why this is the correct answer. In a franchising agreement, the franchisor provides the franchisee the rights to run a business under its established brand. This includes access to proprietary knowledge, operational support, and the ability to market products or services already recognized by consumers.

This model is particularly advantageous for new entrepreneurs, as it reduces the risks associated with starting a business from scratch. Instead of creating a brand and developing a customer base independently, franchisees can benefit from the reputation and customer loyalty that the franchise brand has already built. This often leads to a higher success rate for the business compared to independent startups, where brand recognition and marketing efforts would need to start from ground zero.

The other business types do not share this characteristic. A startup typically refers to a newly established business that is developing a unique product or service without the backing of an existing brand. A co-operative is a business owned and run jointly by its members, who share the profits and benefits. A corporation is a more complex business structure that is legally recognized as a separate entity, typically characterized by limited liability for its owners, but it does not inherently involve franchising rights.