A franchise is actually an agreement between two independent parties which grants certain rights and sets obligations. Some of these are:
The right to market a product or service under a trademark or trade name
The right to market a product or service using particular operating methods
The obligation of the Franchisee to pay Franchisor for rights
The obligation of the Franchisor to provide training
This agreement is the foundation of a successful franchise system.
In summary, a franchise is an agreement between a Franchisor and a Franchisee. A Franchisor has trademarked a brand for a service or product and wishes to grant rights to the Franchisee in exchange for obligations. The obligations of the Franchisee come in the form of ongoing payments. Obligations of the Franchisor are usually to provide ongoing support and training.
