What is defined as a method of distributing goods or services involving licenses?

Franchising is defined as a method of distributing goods or services that involves licenses. In franchising, a franchisor, who owns the overarching brand or business system, grants a franchisee the right to operate a business under its established trade name and business model. This relationship usually includes an initial fee and ongoing royalties, allowing the franchisee to benefit from the franchisor's established brand, marketing support, and business processes.

This model is widely utilized in various industries, including food and beverage, retail, and services, as it allows for brand expansion without the franchisor having to invest directly in new locations. The franchisee typically receives training and operational support, which can enhance their chances of success compared to starting an independent business.

In contrast, partnerships, sole proprietorships, and mergers do not primarily involve the licensing of a business model or brand. Partnerships involve two or more individuals sharing ownership and responsibilities, sole proprietorships are single-owner businesses without the complexities of licensing, and mergers combine two companies into a single entity, often for strategic business reasons. Thus, the correct answer is franchising because it distinctly fits the criteria of distributing goods or services through a licensed agreement.