franchise

(redirected from franchisees)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.
Related to franchisees: franchised

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 periodicals archive ?
As the franchisor, it is your duty to create opportunities for franchisees to interact with each other and reinforce all of the above.
The great majority of franchisees are reputable businessmen who are proud to operate under the 7-Eleven logo," he said.
But perhaps the biggest factor of all is family - - if the business allows the franchisee to provide for the family, to spend time with them and even to work with them, franchisees are likely to stay longer.
Computer Moms' (Mentors on the Move) franchisees are trained on a broad array of skills, offering a one-stop, end-to-end solution for the home or small business.
He suggests that individual franchisees could wield immense power if they banded together to negotiate better arrangements with their corporate superiors.
which has more than 2,800 franchises in the United States and 70 countries, had major disagreements with a large number of its franchisees in the early 1990s.
Franchisees should, as a result, carefully review the provisions of the new Act and its regulations to ensure that they have received all of the information to which they are entitled.
The court found no authority to support the contention that as a matter of law a subsequent franchisee may not amortize an amount greater than the franchise fee charged to the original franchisee.
This Business Report Series on Opportunities in Electricity Distribution Franchisee in India is a strategic guide that provides micro-level of detailing that one needs to be familiar with to champion the business of electricity franchisee.
Understanding underperforming franchisees means understanding whether the poor performance is due to the franchisor's design of the system, the franchisee's operations, other uncontrollable outside factors or a combination of all three.
It's our goal to bring in franchisees of high caliber, who are motivated to grow with us as we reach the pinnacle of the industry.
The 2008 Franchisee Satisfaction Awards presented by Franchise Business Review highlights those franchises whose validation among their franchisees was superior in the industry.