In a franchise arrangement, who trades under the franchisor's name?

• A. Franchisor
• B. Customer
• C. Franchisee
• D. Supplier

Answer: (C)

In franchising, the brand and business format are licensed to another operator. The person who runs the outlet uses the franchisor’s name on the shop, signs, and advertising, so the business trades under that brand. That’s why the entity operating the day-to-day business is described as trading under the franchisor’s name. The franchisor owns the brand and system and earns royalties, while the franchisee manages the running of the business. The customer buys from the business, not under the brand name in a legal sense, and the supplier provides goods to the business.