Ace the HRCI Exam 2026 – Rock Your HR Certification Journey!

Franchising is a business structure in which one company (the franchisor) grants another company (the franchisee) the right to use its name, processes, and products in exchange for a fee or other payment. This option is the correct answer because it involves a local gym selling the rights to use its name and processes to another city, which is exactly what franchising entails.

A subsidiary is a company owned or controlled by another company, often referred to as a parent or holding company. This would not be the correct answer in this scenario because the local gym is not being owned or controlled by another company.

A merger is when two separate companies merge into one. This is not the correct answer because it does not involve the selling of rights or processes to another entity.

A joint venture is a business arrangement in which two or more companies agree to share resources and risks to achieve a common goal. This is not the correct answer because it does not involve the selling of rights or processes, but rather a collaboration between companies.

Therefore, the correct answer is D Franchising.