What Does Franchise Mean?

The term franchise means a privilege of a public nature conferred on an individual, group or a company by a government. Franchising is also quiet well known it is basically the system of doing business in which a franchisor licenses trademark and established system of doing business is given to a franchise in return for a fixed recurring amount.

It generally also has the clause of giving a fixed percentage on the total gross sales or gross profits along with yearly fees. A range of tangible as well as intangibles like national and international advertising, training and many varied forms of support services are generally given by the franchisor, and could also be compulsorily needed by the franchisor, which normally requires audited books, and may question the franchisee or the outlet with time to time surprise spot inspections.

• Franchise means giving the exclusive right to interested parties to use the name and goodwill of a well known and established business in return of loyalty and an annual lumpsum. Franchiser is refered to the parent company (which is the well known and established company) while franchisee is the local company which agreed to do business with the franchiser.


• During the process of franchising the franchiser wouls help the franchisee to setup and run business by giving training, advice, supplying equipment and materials, and also assisting with the location premises and  marketing. The franchiser charges a royalty for its service which is usually in the form of a lumpsum and a share of the profit of the business.

Franchise refer to the methods of practicing and using another person philosophy of business

It's also worth noting that starting a franchise has other benefits. For instance if you wanted to start a gardening franchise the training involves a free trip to Australia!! That's a great incentive to start your own gardening business :) You will also be your own boss which has many advantages.