Arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or trade-name as well as certain business systems and processes, to produce and market a good or service according to certain specifications. The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and gains (1) immediate name recognition, (2) tried and tested products, (3) standard building design and décor, (4) detailed techniques in running and promoting the business, (5) training of employees, and (6) ongoing help in promoting and upgrading of the products. The franchiser gains rapid expansion of business and earnings at minimum capital outlay.

Use franchising in a sentence

  • If you have a small business and it starts doing really well you may want to consider franchising to open up many great new opportunities.

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  • My dad started his new business and immediately began franchising with other companies, which would give us more exposure and it made me excited.

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  • Sometimes a small business is doing so well that the owners may get an offer to consider franchising it to expand.

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