Exam 16: Licensing, Franchising, and Other Contractual Strategies

Which of the following challenges is applicable to the franchisee in a franchising agreement?

Compare and contrast licensing and franchising as foreign market entry strategies. Why is franchising a more comprehensive strategy?

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

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. -Contractor A would most likely oversee each of the following EXCEPT ________.

An advantage of licensing is that firms are able to ________.

Before undertaking contractual entry strategies abroad, management ________.

A know-how agreement grants a firm permission to use another firm's proprietary names, characters, or logos for a specified period of time in exchange for a royalty.

Which of the following is an advantage of licensing?

Treaties that support international protection of intellectual property harm developing economies due to high capital investment.

Which of the following is an advantage of franchising to the franchisee?

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 statements most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm?

Where are the majority of the world's top licensing firms based?

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 which would protect BBB from future international problems. -The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was created by the ________.

Describe the guidelines for protecting intellectual property.

In typical licensing agreements, the licensee compensates the licensor with a down-payment plus ongoing royalties based on sales.

Franchising is an advanced form of licensing in which the the franchisor allows the franchisee, the right to use an entire business system in exchange for compensation.

Cross-licensing often occurs in the semiconductor and chemical industries in order to ________.

Which of the following is characteristic of a know-how agreement?

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

In international leasing, a major advantage for the lessor is the ability to gain quick access to target markets, while putting assets to use earning profits.