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What is Franchising?

Historically, many people have viewed franchising as an industry or as a method of distributing goods or services.  Franchising is much more. 

Franchising may be defined simply as: a business opportunity in which the owner (franchisor) of a service or trademark product grants rights to an individual for local distribution and/or sale of the service or products and, in return, receives a payment or royalty in conformance to quality standards.  This definition encompasses more than a distribution system and is not limited to specific industries.  This explanation of franchising also specifies activities of the primary parties including the franchisor and franchisee. 

Franchising embraces many different forms of business relationships and marketing techniques in providing and delivering a vast plethora of products and services to the end consumer.  Large and small companies in a variety of industries, such as automotive products and services, book stores, business brokers, clothing and shoe stores, construction and service operations, convenience stores, fast food, restaurants, hair salons and services, home furnishings, hotels and motels, optical aids and services, travel agencies, and even telecommunications services have developed and adopted the franchising method of doing business.  Franchising involves the proper utilization of management techniques and functions, marketing, distribution, promotion, financial, accounting, and legal systems.