Complete Food Franchise Guidelines Blog
- A franchise is a type of license that grants a franchisee access to a franchisor’s proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor’s business name. In exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial start-up fee and annual licensing fees.
- A franchise is a business whereby the owner licenses its operations—along with its products, branding, and knowledge—in exchange for a franchise fee.
- The franchisor is the business that grants licenses to franchisees.
- The Franchise Rule requires franchisors to disclosure key operating information to prospective franchisees.1
- Ongoing royalties paid to franchisors vary by industry and can range between 4.6% and 12.5%.