Question

Difference between management contract and contract manufacturing

Answer 1

Explanation:

A franchise contract is a licensing contract. A franchisee owns a business, but pays a proportion of profits, and conducts certain business operations in an agreed upon manner, in exchange for the permission to use the franchisor's business model and intellectual property.

Answer 2

There is thin line of difference between management contract and contract manufacturing.  

Explanation:

1. Management Contract

• When company is indulged in managing tasks of other organizations. Such companies take the contract of management services.

• Fees are the base of remuneration.

• Quality can be reduced. Lack of efficiency will be the matter of concern.

2. Contract manufacturing

• When a company takes the contract for manufacturing products as per specifications provided by the host company.

• Amount are charged based on products produced.

• Licensing of such companies are more risky.