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

External links

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