What is a Franchise

A franchise is the agreement or license between two legally independent parties which give

• A person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)
• The Franchisee the right to market a product or service using the operating methods of the franchisor
• The Franchisee the obligation to pay the franchisor feesfor these rights
• The Franchisor the obligation to provide rights and support to franchisees

Franchise agreement

franchisor

OWNS TRADEMARK OR TRADE NAME

Provides support:

• (Sometimes) Financing
• Advertising and Marketing
• Training

Receives Fees

franchisee

USES TRADEMARK OR TRADE NAME

Expands business with franchisors support

Pays Fees