franchising

upright=1.35|thumb|right|A McDonald's franchise in [[Moncton, New Brunswick, Canada]] Franchising is a business practice where a company licenses its business model to another company, or more precisely, where the franchisor licenses some or all of its knowhow, procedures, intellectual property and other rights to sell its branded products and services to a franchisee. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.

AI overview

Franchising is a business arrangement where a company (the franchisor) licenses its business model, brand name, and operating methods to another business (the franchisee), who pays fees in exchange for the right to sell the franchisor's products and services. This matters because it allows businesses to expand rapidly by having independent operators run locations under their brand, while franchisees can start a business using an already-proven model and established brand name.

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Commons category: Franchises

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35 sections

Contents

History
Fees and contract arrangement
Example
Rationale and risk shift
Advantages and disadvantages of franchising as an entry mode
Obligations of the parties
Regulations
Australia
New Zealand
Brazil
Canada
China
India
Kazakhstan
Europe
France
Italy
Norway
Russia
Spain
Turkey
United Kingdom
United States
Community Franchising
Definition
Example
Operations
Social franchises
Third-party logistics franchising
Event franchising
Home-based franchises
See also
Further reading
References
External links

The word franchise is of Anglo-French derivation - from , meaning "free" and it is used both as a noun and as a transitive verb. For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or "chain stores". Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk.