The definition of a franchise (taken from the federal definition of a franchise -- 16 Code of Federal Regulation 436 et seq.) and paraphrased here is: (a) “franchisor’s” (owner of the trademark) grant to franchisee (person or entity granted the right to use the trademark) of the right to use franchisor’s trademark; (b) for a fee; (c) and franchisor exerts a “significant degree of control over the franchisee’s method of operation,” or “provides significant assistance in the franchisee’s method of operation.”
This model applies to owner/entities that want to start a whole new business and grow a larger equity building business asset. A franchisor can expand and collect fees from others that want to purchase, own and operate a franchised business system that’s offered by the owner/entity and operate under their trademark(s), business systems, training and ongoing support.
