Which of the following best describes a franchise?

A franchise is best described as an authorization for commercial activities because it represents a legal and commercial relationship between a franchisor and a franchisee. In this arrangement, the franchisor grants the franchisee the rights to operate a business under the franchisor's brand and sell its products or services. This connection allows franchisees to benefit from established branding, support, and operational guidelines, enabling them to tap into a proven business model.

The essence of franchising lies in this authorization to conduct business, which distinguishes it from other concepts such as a corporation that sells stock, a labor union focused on worker representation, or government regulations aimed at overseeing business practices. Franchising thus plays a crucial role in business expansion and economic growth by allowing brand replication while maintaining standards of quality and service associated with the franchisor.