What is the role of a Franchise?

The role of a franchise is accurately captured by the choice that states it grants licenses to merchants for selling goods or services. In a franchise arrangement, a franchisor (the owner of the franchise) provides the franchisee (the licensee) with the rights to operate a business using the franchisor's brand, products, and operational systems. This often includes the right to use trademarks, proprietary knowledge, and established business practices.

Franchising allows individuals to start a business by leveraging an established brand's reputation and support structure, which can contribute to higher success rates compared to starting a completely new, unbranded business from scratch. The franchisor often provides comprehensive training and ongoing support to help ensure that franchisees maintain the quality and standards associated with the brand.

The other options presented do not accurately describe the primary role of a franchise. Funding new businesses relates more to investors or venture capitalists rather than franchisors. Overseeing government regulations typically falls under the purview of regulatory agencies rather than franchise operations. Providing training for retail employees might occur within a franchising context, but is not the core function of a franchise itself; instead, it is a component of the support that franchisors provide to franchisees.