franchise

(redirected from franchises)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
'On behalf of the PFA Board of Trustees and Officers, we are pleased to announce the staging of the 4th edition of the 'Franchise Negosyo Para Sa Davao' which is part of PFA's thrust to promote entrepreneurship via franchising all over the Philippines.
'There is also a huge opportunity for technology to be used to grow the franchise industry.
* A three-day international expo that is a one-stop shop of franchise and other investment opportunities from home-grown and foreign concepts; (March 29 to 31)
The WFC is a non-political organisation consisting of more than 40 national franchise associations from around the globe, in addition to the European Franchise Federation, Ibero-American Franchise Federation, and Asia-Pacific Franchise Confederation (APFC).
"There are thousands of successful franchise companies operating in North America, but many of those companies do not offer a solid investment opportunity for the actual franchise owners," says Eric Stites, CEO of Franchise Business Review.
* Franchise fees: There can be several one-time fees and ongoing fees that franchises charge.
Factiva has both a thesaurus term (Franchises) and a code (C335) for all aspects of the industry and the business model.
The FTC Rule does not apply to franchises granted for a location outside the United States.
The early 2000s were slow in terms of foreign franchises arriving in Pakistan but the momentum picked up in the mid-2000s and then it was boom time, despite the many lows that the Pakistani economy faced.
While there are many examples of successful franchises, buying a franchise is no guarantee of success.
Banks have remained supportive of the industry because franchises are based on proven business models.