What term describes a business that operates under a well-known brand name?

A business that operates under a well-known brand name is referred to as a franchise. This term specifically describes a system in which one party (the franchisor) grants another party (the franchisee) the rights to use its trademark, business model, and operational methods in exchange for a fee or percentage of sales. Franchising allows businesses to expand their brand presence in various locations while maintaining a standard of quality and brand consistency.

In the context of business operations, franchising can be advantageous because it enables entrepreneurs to start their businesses with an established brand that already has a reputation and customer base. This brand recognition can lead to increased chances of success compared to starting a brand-new, independent business from scratch. It also provides franchisees with training and support, making it easier to navigate the complexities of running a business.

While the other terms—merger, acquisition, and diversification—relate to different business strategies and structures, they do not specifically pertain to the operation under a well-known brand name in the same way that franchising does. Mergers and acquisitions involve the combining or purchasing of companies, and diversification refers to a strategy where a business increases its range of products or services.