Summary
Overview of franchising
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Extract
The franchise option.
In a franchise relationship, one party, the franchiser, licenses another, the franchisee, to sell the franchiser's goods or services in a particular business for a certain period. The franchisee ordinarily pays a fee for this privilege plus a royalty on gross sales. The term "franchise" refers not only to the right to sell a particular good or service but to the place in which the franchisee exercises that right. Although this may look like the typical supplier-dealer relationship, generally a franchisee handles a franchiser's line on an exclusive basis, whereas a dealer may carry several, even competing lines.
A budding entrepreneur has the option of buying a franchise either directly from a franchiser or from a current franchisee. Overview Broadly speaking, there are two types of franchising. The first type is product and trade name franchising, such as an automobile dealership, in which the franchisee concentrates on one product line. The franchiser grants the franchisee the rig...See the full content of this document
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