Which two of the following are franchises?

• A. A local family-owned cafe
• B. A Holiday Inn motel and a McDonald's restaurant
• C. A single-owner bakery
• D. A government-run hospital

Answer: (B)

Franchising is when a brand owner licenses its name, systems, and operating methods to independent operators who run locations under that brand in exchange for fees and royalties. The two examples that fit this setup are a Holiday Inn motel and a McDonald’s restaurant, because both operate under a recognizable brand with standardized branding, menus or service methods, training, supplier networks, and ongoing support from the franchisor. The individual locations are owned and run by separate entrepreneurs, not by the brand owner itself. A locally owned cafe and a single-owner bakery are typically independent businesses without a licensing relationship to a larger brand, so they aren’t franchises. A government-run hospital isn’t a franchise either; it’s a public-sector facility operated by the government.