Questions: The fast-food industry is a good example of a business sector where licensing is a poor option for FDI. True or False

The answer is True: The fast-food industry is a good example of a business sector where licensing is a poor option for FDI.

Explanation:

1. True: Licensing in the fast-food industry can be a poor option for foreign direct investment (FDI) because it often involves transferring proprietary knowledge, such as recipes, branding, and operational processes, to a licensee. This can lead to a loss of control over the brand and quality standards, which are crucial in the fast-food sector. Additionally, the fast-food industry relies heavily on maintaining a consistent customer experience across different locations, which can be challenging to achieve through licensing agreements.

2. False: This option would suggest that licensing is a suitable option for FDI in the fast-food industry. However, given the importance of brand consistency and quality control in fast food, licensing can pose significant risks. Companies often prefer franchising or wholly-owned subsidiaries to maintain tighter control over operations and brand integrity.

In summary, while licensing can be a viable strategy in some industries, the fast-food sector typically requires more direct control over operations, making licensing a less favorable option for FDI.