The supplier in the franchise relationship is known as a franchisor while the Franchisee gains the right to sell products in exchange for some type of consideration.
What is Franchising?
- Franchising is based on a marketing idea that a company can use as a strategy for business growth.
- In cases where it is used, a franchisor grants a franchisee a license to use all or part of its intellectual property, operating methods, business model, brand, and rights to market and sell its branded goods and services.
- In exchange, the franchisee agrees to pay specific fees and adhere to a number of conditions, which are normally outlined in a franchise agreement.
- The conventional arrangement in which the franchisee is an individual, unincorporated partnership, or tiny privately-held business ensures the franchisor has significant legal and/or economic advantages over the franchisee, making franchising rarely an equal partnership.
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