52 Reference Miracle FaceTara developed a great new type of

52. Reference: \"Miracle Face.\"Tara developed a great new type of face cream guaranteed to provide total sun protection, remove wrinkles, and result in anyone looking at least ten years younger. Her product, Miracle Face, became extremely popular in the U.S., where she has several shops, and also in other countries to which it was shipped. Tara has a number of individuals in other countries seeking to team with her in sale of Miracle Face. Sam, a citizen of Mexico asks that she grant him permission to use her name and any associated trademarks, and allow him to sell Miracle Face in Mexico. Tara has an offer, however, from another Mexican citizen, Maria. Maria proposes that she and Tara associate together, open a business to sell Miracle Face, and share profits and management responsibilities. Tara has also thought about simply opening her own business in Mexico in conformity with Mexican laws. She would then, simply, hire employees in Mexico to sell the product. Another matter Tara has considered is simply arranging for her products to be shipped to Mexico for sale, and she is interested in the effect of any trade agreements in effect between the U.S. and Mexico. Assuming that Tara decides to proceed as Maria proposes, their arrangement would be aln) A. Franchisee, Franchisor arrangement B. Affiliator, Affiliatee arrangement C. Joint venture D. Licensing agreement E. Subsidiary agreement Ask a homework question ? 278 tutors are online

Solution

C. Joint Venture -

The agreement between Maria and Tara would be a joint venture because they both are operating as separate entities and for the purpose of business they are coming together to form a new entity. The business entities of Maria and Tara are both independent and none have any stake-holding or interest in the other\'s entity. Also the agreement between the two specifies sharing of profits and responsibilities which is the characteristic of a joint venture. Hence they both will be equally responsible for cost profits and revenues associated with the business and then what will be involved in the execution and running of the business which is selling of Miracle Face.

It is not an affiliator affiliate agreement because neither of the two parties have a stake holding in the other. It is not a franchise relationship because Tara is not providing any entitlement to name or trademarks of her brand to Maria.

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