Vimonland Theme Park sells the necessary rights to an investment company to run a Vimonland theme park in a foreign country
The investment company gains most of the profits from the enterprise while paying Vimonland Theme Park a percentage as royalties. This is an example of _____.
a. licensing
b. contract manufacturing
c. exporting
d. importing
ANSWER: a
Licensing is the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge. The licensee, in turn, pays the licensor a royalty or fee agreed on by both parties. Vimonland Theme Park is selling an investment firm the rights to run its theme park in a foreign country. The investment company pays Vimonland Theme Park a percentage of its profits as royalties. Therefore, this is an example of licensing.
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