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  • Writer's pictureCrystal Lizama, CFE

What is Franchising?

What is franchising?


Franchising is a business model in which a company, known as the franchisor, grants a license to an individual or entity, known as the franchisee, to use the franchisor's trademarks, business model, and other intellectual property to operate a business. In return for this license, the franchisee typically pays the franchisor a franchise fee, as well as ongoing royalties based on the franchisee's sales.


Franchising is a popular and successful model for both franchisors and franchisees. Franchisors benefit from the franchise model by expanding their brand and customer base without incurring the costs and risks associated with opening and operating new locations themselves. Franchisees, on the other hand, benefit from the support and resources provided by the franchisor, as well as the established brand and customer base, to quickly and successfully launch their own business.


Franchising is regulated by various laws and regulations in different countries, which establish certain requirements and standards for the franchise relationship. In order to become a franchisor, a company typically needs to have a proven business model and a strong and established brand. The franchisor must also develop and maintain a franchise agreement and provide the necessary support and resources to franchisees to help them succeed.


Franchising is a popular and successful business model that allows companies to expand their reach and franchisees to quickly and successfully launch their own business. By leveraging the support and resources provided by the franchisor, as well as the established brand and customer base, franchisees can achieve their entrepreneurial dreams and grow their business.


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