What Is a Franchise?

Franchise is a type of business organization in which the franchisor, who has a successful product or business model, agreeing into a perpetual contractual relationship with other businesses called franchisees, which function under the franchisor’s trade name and typically with the franchisor’s guidance, for a fee.

Companies use the franchise model to widen their distribution by teaming up with partners who open company stores in towns. The retail space is used or rented by the local partner while the company brings in the business know-how and a proven business concept.

Back ↵