Dipper Donuts licenses its brand name to foreign firms as long as they agree to run their restaurants on exactly the same lines as Dipper Donuts restaurants elsewhere in the world. In return, the foreign firms have to pay Dipper Donuts a percentage of their profits. This is an example of

Franchise

Explanation:

Considering the scenario described above, this is an example of a FRANCHISE.

This is because a Franchise is an arrangement involving a Franchisor and a Franchisee, whereby the franchisee conducts a business by utilizing the brand name and trademark of a franchisor.

In this type of business system, the franchisee typically pays a form of royalty and in some arrangement an initial payment for the right to conduct its business under the franchisor's name and system.

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