What is a franchise?
Franchise is a privilege or the right given to the
individual or the group that allows them to carry out
a specific kind of commercial activity. The legal concept
of franchise can be first found in the middle age when
a knives and/or abbots could get a right to run a portion
of the lord's land. The fairs and the markets were
also organized s franchises as well as many other commercial
Today the term „franchise agreement“ is used to describe
services provided by franchisor the payment to the
franchisor and the terms of termination of the franchise.
Franchise is a model of business expansion, distribution
of goods and services, and the opportunity to run business
under the recognized name: brand.
Franchise is when the company (franchisor) gives an
individual or a group (franchisee) a right to use its
brand and it's business model according to a franchise
agreement. The franchisor provides a franchisee with
a support and also in some cases have a certain control
over the franchisees business. In return franchisee
pays to the franchisor an entrance fee and the royalty
for the use of its brand and the business model.
Franchise is the legal and commercial relationship
between the owner of the trademark and the individual
or the group that seeks the right to use that identification
in doing business. Franchise is the management model
between those two interested sides.
There are numerous examples of private franchises. The
franchisor sells the franchises to the sales people,
giving them the right to sell their products in particular
territories. In the recent years the fastest growing
segment of franchise business is in service businesses.
Franchises are created to offer services such as: accounting,
printing, coping, direct mailing, house cleaning, computer
sales and services, etc.