Franchising
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Franchising
Franchising (/ˈfræn.tʃaɪ.zɪŋ/) is a business model in which a franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee.
Etymology
The term "franchise" is derived from the Old French franchir, meaning "to free". In this context, franchising can be seen as a way of "freeing" an individual to own and operate their own business.
Related Terms
- Franchisor: The company that allows the franchisee to run a location of their business.
- Franchisee: The individual or company that is given the right to do business under the franchisor's established model and trademark.
- Royalty Fee: A regular, ongoing payment that the franchisee pays to the franchisor after buying into the franchise.
- Business Model: A plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing.
- Trademark: A symbol, word, or words legally registered or established by use as representing a company or product.
See Also
- Business Format Franchising
- Product Distribution Franchising
- Master Franchise
- Area Developer
- Multi-Unit Franchise
External links
- Medical encyclopedia article on Franchising
- Wikipedia's article - Franchising
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