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Answer: Under a licensing arrangement, where the company uses another entity's brand name in return for a royalty.
The correct answer is **C** because a licensing arrangement allows a company to use another entity's brand name in exchange for a royalty. This differs from a franchise model (A), which involves exclusive relationships with distributors, and contract manufacturing (B), where goods are produced for others to market.
Author: LeetQuiz Editorial Team
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A company manufactures and sells a product using another entity's brand name in exchange for a royalty. This business model most likely operates:
A
Under a franchise model, where distributors or retailers maintain a tightly defined and often exclusive relationship with the parent company.
B
As a contract manufacturer, producing goods to be marketed under another entity's brand.
C
Under a licensing arrangement, where the company uses another entity's brand name in return for a royalty.