A privilege granted or sold, z.B for the use of a name or the sale of products or services. Under its simplest terms, a franchise is a license of the owner of a trademark or a business name that allows another to sell a product or service under that name or brand. More generally, a franchise has become a complex agreement under which the franchisee undertakes to manage a business or sell a product or service according to the methods and procedures prescribed by the franchisor, and the franchisor undertakes to support the franchisee through advertising, advertising and other consulting services. The franchise agreement will go into detail to learn more about the franchise relationship. It will contain detailed information on proprietary statements and outline things like website maintenance and upgrade requirements. Franchised: the name given to a person or entity of a company owning a franchise business. Acknowledgement: Item 23 of the franchise publication document (FDD) signed by the potential franchisee and made available to the franchisor (on paper or electronic form) as proof of the date on which the FDD was received by the person concerned. Advertising costs: the amount the franchisee pays to the franchisor as a contribution to the franchise system advertising fund. The fund is generally created to pay for the creation and placement of advertising and is used to offset franchisor management costs related to “retail/brand” advertising.
Payments are generally calculated as a percentage of gross sales. Agent: a party that has an implicit or explicit power (oral or written) to act on behalf of someone else. Authorized promotional material: materials made available by the franchisor for the use of the franchisee in its local market or materials produced by the franchisee approved by the franchisor. Authorized products: certain products that a franchisee must purchase to be used in his or her business. Franchisor may also specify an approved supplier (see the definition of the authorized supplier below). General to control the quality of products used or sold by the franchisee during the execution of its operations. Authorized site: a site designated by the franchisor will meet its criteria satisfactorily. The franchisor`s permission to set up is generally not an indication of the potential for sale or the success of the site. Arbitration: a method of dispute resolution.
Franchise space: a franchise relationship that allows the franchisee to open multiple sites, usually within a defined area, within a predetermined schedule. Franchisees in the territory generally pay a territorial fee for the rights granted by the franchisor. Licensed/designated supplier: A supplier of products and/or services used to operate the franchise authorized by the franchisor to sell to franchisees. Maybe the franchisor or a subsidiary. Broker: an external seller or a company that sells franchises for a franchisor for a fee or commission. Franchise brokers are disclosed as part of the offer circular. Some brokers like to call themselves franchise consultants, but that`s a bad name (see the definition of franchise consultants below). Franchising business format (BFF): a franchise occurs when a company (the franchisor) licenses a person or group (the franchisee) of its business name (brand) and operating methods (its operating system) that undertakes to work under the terms of a contract (franchise agreement). The franchisor supports the franchisee and, in some cases, has some control over how the franchisee operates under the brand. In return, the franchisor generally pays the franchisor an initial fee (so-called franchise) and a lawsuit (known as the royalty) for the use of the trade name and operating methods.