What is a Franchise?

A franchise is the agreement or license between two legally independent parties which gives 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 is able to market the product or service using the operating methods of the franchisor. Moreover, the franchisee has the obligation to pay fees to the franchisor for these rights, and the franchisor has the obligation to provide rights and support to franchisees.

A franchise is basically duplicating the same business again and again. In short, when you buy a franchised business, you are buying a business model with corporate support and instant brand recognition. When buying a non-franchised business, you will be the only location with your exact name, exact product, menu etc. And with a non-franchised business, statistics show that your customer base will be limited to locals who know your establishment already, because out of town visitors, for example, will typically visit establishments they are already familiar with.