Jessa has paid an upfront lump sum plus a royalty on all sales to a specific fast-food company in return for the right to operate a business using its name and format in a specific location. This agreement makes Jessa a

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BlackTom AI · Accepted Answer

The question describes an arrangement where Jessa pays an upfront lump sum plus a royalty on all sales to a specific fast-food company to operate a business using that company’s name and format in a particular location. This setup is characteristic of a franchise relationship.
Option 1: franchiser. A franchiser is the entity that grants the rights to operate a business under its brand and system. In this scenario, Jessa is the recipient of those rights, not the giver, so this option is incorrect.
Option 2: franchisee. A franchisee is the person or business that pays for the rights to use a franchisor’s brand, system, and ongoing support, typically including an upfront fee and royalties on sales. This matches the described arrangement, so this option accurately identifies Jessa’s role.
Option 3: supplier. A supplier provides goods or materials to a business but does not grant brand usage or operating format rights. The agreement described involves brand and operating format rights, not merely supply of goods, making this option incorrect.
Option 4: retailer. While a franchisee may operate as a retailer, the term “retailer” is too broad and does not specify the formal franchising relationship, branding rights, or ongoing royalty arrangement. This makes it an inappropriate label for the described arrangement.
Option 5: wholesaler. A wholesaler sells goods in large quantities, typically to retailers or other businesses, not to end up operating under a specific brand’s name and format. This option does not fit the described franchise-like agreement and is incorrect.

Jessa has paid an upfront lump sum plus a royalty on all sales to a specific fast-food company in return for the right to operate a business using its name and format in a specific location. This agreement makes Jessa a

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