franchise


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Related to franchise: Franchise agreement

Franchise

An agreement in which an entrepreneur buys a license to use another business' products, brand, proprietary knowledge, and trade secrets. This allows the entrepreneur to start a business without building up his/her own brand or products. This is a common way to start a business, especially in highly competitive industries. An industry that utilizes franchises on a regular basis is fast food; because of stiff competition, it is generally more profitable for one who wishes to start a fast food restaurant to buy a franchise.

franchise

1. An agreement between a firm and another party in which the firm provides the other party with the right to use the firm's name and to sell or rent its products. Selling franchise rights is a method of expanding a business quickly with a minimum of capital. See also franchisee, franchisor.
2. A right granted to another party by a government to engage in certain types of business. For example, a firm may obtain a government franchise to supply certain public services within a limited geographic region.

franchise

the granting by one company to another company (exclusive franchise) or a number of companies (non-exclusive franchise) of the right/s to supply its products. A franchise is a contractual arrangement which is entered into for a specified period of time, with the franchisee paying a royalty to the franchisor for the rights assigned. Examples of franchises include the McDonald Burger and Kentucky Fried Chicken diner chains, Tie Rack and Dyno-Rod.

Franchises are a form of co-partnership, offering mutual benefits. They allow the franchisor to expand sales rapidly and widely, sometimes on a global basis, without having to raise large amounts of capital, by building on the efforts of a highly motivated team of entrepreneurs. Individual franchisees are usually required to contribute the bulk of the investment in physical assets and hence have a personal interest in the success of the venture. For his part, the franchisee obtains access to an innovative product or novel selling method, with the franchisor providing back-up, technical assistance, specialized equipment and advertising and promotion. See VERTICAL MARKETING SYSTEM, BUSINESS STRATEGY, EXTERNAL GROWTH, BUSINESS FORMAT FRANCHISING.

franchise

the assignment by one FIRM to another firm (exclusive franchise) or others (nonexclusive franchise) of the right(s) to supply its product. A franchise is a contractual arrangement (see CONTRACT) that is entered into for a specified period of time, with the franchisee paying a ROYALTY to the franchisor for the rights assigned. Examples of franchises include the Kentucky Fried Chicken and MacDonald's burger diner and ‘take-away’ chains. Individual franchisees are usually required to put up a large capital stake, with the franchisor providing back-up technical assistance, specialized equipment and advertising and promotion. Franchises allow the franchisor to develop business without having to raise large amounts of capital.

franchise

(1) A contractual relationship whereby one party (franchisee) is entitled to use the trade name, image, procedures, and trade secrets of another (franchisor) usually in return for paying an initial purchase price and a percentage of gross revenues over the period of the arrangement. In most instances,there is a separate fee for the franchisee's share of national and regional advertising campaigns. Real estate franchises include Century 21, RE/MAX, and ERA. (2) A government grant of some privilege, such as the ability to operate as a corporation or the ability to sell drinks and sandwiches in the county courthouse.

References in classic literature ?
More and more I am convinced that the final solution of the political end of our race problem will be for each state that finds it necessary to change the law bearing upon the franchise to make the law apply with absolute honesty, and without opportunity for double dealing or evasion, to both races alike.
For the bourgeois of Paris were aware that it is not sufficient to pray in every conjuncture, and to plead for the franchises of the city, and they had always in reserve, in the garret of the town hall, a few good rusty arquebuses.
At the same time that his agents were purchasing corner lots and entire blocks in the heart of the business section and the waste lands for factory sites, Day was rushing franchises through the city council, capturing the two exhausted water companies and the eight or nine independent street railways, and getting his grip on the Oakland Creek and the bay tide-lands for his dock system.
I am but a poor commoner of England myself, and yet I know something of charters, liberties franchises, usages, privileges, customs, and the like.
When they'd finished with the lands and forests and mines, they turned back, gambling for any little stakes they'd overlooked, gambling for franchises and monopolies, using politics to protect their crooked deals and brace games.
We had our franchise package together, we explained it, and they wanted to be a part of it.
Los Angeles city officials have allowed cable television companies to get away with providing consumers poor quality service with out-of-date technology even as they fell years behind in their franchise fee payments, an audit by Controller Laura Chick reported Thursday.
With markets providing one set of challenges, some recyclers are also now seeing potential problems with the issue of franchise agreements.
Without any formal business experience, Brazilian Maria Sueli Cavalcanti picked a Brazilian shoe store chain called Mister Cat for her first franchise investment.
A franchise seemed just the ticket, promising a "95-percent success rate" and the security of a major trademark and corporate backing--critical for someone with no experience in the field.
For the third consecutive year, global real estate franchisor, RE/MAX International ranks highest among real estate franchise organizations - at number 19 in the Entrepreneur 22nd Annual Franchise 500 [R].
Many |franchise investors~ find that they purchased low-paying jobs with few protections or benefits |or~ lose everything in fraudulent franchise ventures," he told Success magazine.