Definition: A franchisee is an individual or company that owns a franchise. The franchisee purchases the franchise to the franchisor and then runs a business under certain terms agreed in a contract. The agreement generally includes specific rights and duties for each party, franchisor and franchisee...
The franchise model is used by a number of businesses both at a regional and international level. The franchisor’s original business sells the rights to use its name and ideas, while the franchisee purchases the rights to sell associated goods or services under the existing business’s name. ...
Product distribution franchising, also known as traditional franchising, is an arrangement where the franchisor grants the franchisee the right to buy its products and use its trade name. This typically connects a single manufacturer with a network of distributors. For example, suppose you own a car...
According to FTC Rule 436, “This element will be satisfied only when the franchisee is given the right to distribute goods and services which bear the franchisor’s trademark, service mark, trade name, advertising, or other commercial symbol.” Note that it is the right, not the obligation,...
The benefit to the franchisee is that it has the option to sell new and CPO cars from a certain manufacturer, which they would not get to do otherwise. Manufacturers benefit because they do not need to distribute their products, and dealers order vehicles before the production is complete, so...
A master franchisee is essentially a mini-franchisor for a particular territory. In most franchise systems, they own and operate only a small number (or none) of the units directly. Rather, they find individual franchisees to purchase and run the outlets in their territory. In return for recr...
franchisee signs any agreements or pays any fees. As for what the franchise offering circular is, it includes various information about the franchise and its operation, to help the interested company determine whether becoming a franchise would be the right business move. Among other things, the ...
A franchise is a type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor's business name. In exchange for acquiring a franchise, the franchisee usuall...
According to the FTC, franchisors have an obligation to provide the franchisee with the FDD at least 14 days before it needs to be signed or before any initial money is exchanged. The franchisee has a right to a copy of the FDD after the franchisor has received the application and agreed ...
What is the difference between a licensee, distributorship, and a franchisee?Eric Stein