Franchising is a method of distributing products or services.At least two levels of people are involved in a franchise system: (1) the franchisor, who lends his trademark or trade name and a business system; and (2) the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
Similarly, franchisees have a head start because of the support provided by the franchise system.
Franchising means being in business for yourself but not by yourself.
Whether it's accounting and financing, advertising and public relations, personnel management, purchasing, or inventory control, franchisors are there to provide “hands on,” one-to-one assistance.
While franchising does provide opportunities, it does not create miracles.
In business format franchising, the franchisor prescribes for the franchisee a complete plan, or format, for managing and operating the establishment.