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A business arrangement where private entrepreneurs purchase the rights to open and run a location of a larger company is known as a:

A. Franchise

Answer :

Final answer:

A franchise refers to a business arrangement where private entrepreneurs purchase the rights to open and run a location of a larger company. It's a type of private enterprise system allowing individuals to run their own business under the umbrella of an established brand.

Explanation:

A business arrangement where private entrepreneurs purchase the rights to open and run a location of a larger company is commonly referred to as a franchise. This model of business is part of what is known as a private enterprise system, where private individuals or groups own and operate companies.

For instance, an individual might buy a franchise of a well-known fast food chain and then run this location as their own business, whilst being required to adhere to certain rules and strategies as outlined by the larger company.

A franchise is different to other forms of business ownership such as a sole proprietorship, where a company is owned and run by one person, or a public company which is owned by shareholders and run by a board of directors. Franchising offers entrepreneurs a way to start their own business whilst benefiting from the brand recognition and support network of an established company.

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