A franchise is an agreement or license entered into by two parties, the franchisor and the franchisee.
A franchise gives a person or group of people - the franchisee - the rights to market a product or service using the trademark of another business (the franchisor).
- The franchisor has the obligation to provide these rights and generally support the franchisee, both initially and on an ongoing basis.
- The franchisee has the right to market the product or service using the operating methods of the franchisor.
- The franchisee has the obligation to pay the franchisor certain fees as agreed to in the franchise agreement.