In DECA, what does the term “franchise” refer to?

In DECA, what does the term “franchise” refer to?

• A. A company that allows stock trading
• B. A business requiring a large capital investment
• C. A legal agreement for operating a business under a brand
• D. A type of non-profit organization

Answer: (C)

The term “franchise” in DECA refers specifically to a legal agreement that allows an individual or business (the franchisee) to operate under a recognized brand (the franchisor). This relationship typically includes the right to use the franchisor’s trademark, business model, and operational support in exchange for fees and a percentage of sales. Franchising is a popular business model because it allows the franchisee to benefit from established brand recognition and a proven system, reducing risks associated with starting a new business from scratch. In contrast, other options describe different business concepts that do not align with the definition of a franchise. Stock trading relates to ownership in publicly traded companies, a large capital investment implies a scale of finance unrelated to the franchise model, and a non-profit organization is defined by its model of operation and mission rather than the franchising structure.

The term “franchise” in DECA refers specifically to a legal agreement that allows an individual or business (the franchisee) to operate under a recognized brand (the franchisor). This relationship typically includes the right to use the franchisor’s trademark, business model, and operational support in exchange for fees and a percentage of sales. Franchising is a popular business model because it allows the franchisee to benefit from established brand recognition and a proven system, reducing risks associated with starting a new business from scratch.

In contrast, other options describe different business concepts that do not align with the definition of a franchise. Stock trading relates to ownership in publicly traded companies, a large capital investment implies a scale of finance unrelated to the franchise model, and a non-profit organization is defined by its model of operation and mission rather than the franchising structure.