Exam 15: Licensing, Franchising, and Other Contractual Strategies

When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________.

Information technology has increased the success and growth of international franchising operations by ________.

Wonder Cat Licensing (Scenario) Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions. -Which of the following most likely supports an ACC decision to NOT enter a licensing agreement with the Chinese firm?

Infringement of intellectual property is the unauthorized use or reproduction of products and services protected by a patent, copyright, trademark, or other intellectual property right.

Which of the following is an example of a trademark licensing agreement?

Big Boy Burgers (Scenario) Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises around the world. Recently, BBB managers have been concerned about protecting the firm's intellectual property, which includes the recipes for its unique burger sauces and specialty burger buns. Although BBB has never experienced a theft of intellectual property, the firm's managers feel BBB should be more cautious. Managers are meeting with security and legal experts to discuss the options available to the firm that would protect BBB from future international problems. -The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was created by the ________.

An industrial design is intended to improve the product's aesthetics and usability as well as increase its production efficiency, performance, or marketability. The Volkswagen logo is a well-known industrial design.

The franchisor can rapidly internationalize by leveraging the drive and knowledge of local franchisees but risks disseminating its intellectual property to unauthorized parties.

Azoo Government Projects (Scenario) The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement. -Which of the following most likely supports Azoo government's decision to award the project bid to Contractor A?

In a typical licensing agreement, after the relationship is established, the licensor is not required to make a capital investment in the foreign market.

In a licensing agreement, ________ is responsible for local sales.

The greatest amount of licensing occurs in the ________ industries.

Which of the following statements is TRUE about international franchisors?

In a franchising agreement, the franchisee provides training, ongoing support, and the right to participate in cooperative marketing programs to the franchisor.

Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract.

The reputation of a licensor will be jeopardized by a licensing agreement if the licensee ________.

Licensing agreements enable energy and defense firms to enter nations that allow the foreign ownership of businesses related to national security.

Describe six unique qualities shared by all cross-border contractual relationships.

Big Boy Burgers (Scenario) Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises around the world. Recently, BBB managers have been concerned about protecting the firm's intellectual property, which includes the recipes for its unique burger sauces and specialty burger buns. Although BBB has never experienced a theft of intellectual property, the firm's managers feel BBB should be more cautious. Managers are meeting with security and legal experts to discuss the options available to the firm that would protect BBB from future international problems. -Which of the following statements most likely supports BBB legal experts fully investigating the intellectual property laws of each nation in which BBB has franchises?

What is cross-licensing? Why does the pharmaceutical industry tend to favor cross-licensing arrangements? Explain your answer in a short essay.