Questions for chapter review

1. Describe what is the main difference between a business based on the sale of intellectual property rights and other ways of doing international business?
2. What are the three main ways of doing international business based on intellectual property rights? Explain each of them?
3. What is the difference between licensing and franchising?
4. Explain with examples the difference between licensing and patent selling?
5. Which business sectors are very often developed internationally through licensing? Give examples. Discuss their points of similarities?
6. Explain how the business is expanded to other countries using licensing? What is the purpose of granting license?
7. Explain what are the principles of patent registration and sale of the right to use a patent?
8. Give examples of international patents.
9. What is a franchise and franchising? Explain and give examples.
10. Why has franchising become a very popular way of doing international business? Give your arguments.
11. What does the franchisor transfer to the franchisee? Explain the three most common franchises?
12. What numbers of units are franchised for one franchisee? What is a master franchise? Why do international franchisors often distribute franchises through intermediaries?
13. What kind of competitive protection does the franchisor provide to the franchisee in the contracted territory? Give examples.
14. What advantages of the franchisor make it attractive to the franchisee?
15. Explain how the law of economies of scale is used in international franchising business?
16. What are the threats to the franchisor?
17. List and explain the benefits received by the franchisee.
18. List the main threats to the franchisee. Explain and give examples.
19. Who bears the biggest investment burden in the case of a franchise? Franchisor or franchisee? Explain and give examples.
20. In the case of a franchise, who is liable to the customer for improperly rendered service or other damage? Franchisor or franchisee? Explain and give examples.
21. What are the key elements of franchise pricing?
22. Discuss the significance of constant franchise fee that does not depend on the income of the franchisee?
23. Why do franchisors usually set a variable fee as a percentage of revenue rather than profit?
24. What additional charges must be paid to the franchise owner?
25. What advantage does an international franchising franchisee have over a local boutique competitor? Give examples along with arguments?

franchising