Franchise Lingo

So what is the difference between a Franchise, Franchisor and a Franchisee? What is a Franchise Agreement? All this franchise lingo can get a bit confusing so here is an excerpt from our newly created glossary!


Franchise:
A business concept that offers specific products or services and takes on a certain business identity. The business concept is usually repeated numerous times throughout an area by franchisees purchasing and running their own franchise in a specific area/s as determined by the developer of the concept (franchisor).


Franchisor:
A franchisor is the developer and owner of a franchise concept. The franchisor is responsible for growing the franchise concept whether it be locally, internationally or both and for ensuring the consistency of the brand and service amongst the franchisees.


Franchisee:
A franchisee is the owner of a particular franchise in a particular area/s. A franchisee buys a franchise from the franchisor and is responsible to run that franchise business in that area.


Franchise Agreement:
A document that contains the details of the franchise purchase and agreements between the franchisor and franchisee. It may contain information on initial fees, ongoing fees, obligations of both the franchisor and franchisee with regards to the start-up and running of the business, territorial/ area limitations, legal information and conditions as well as general information, rules and regulations.