franchising

Arrangement where one party (the franchiser) grants another party (thefranchisee) the right to use its trademark or trade-name as well as certainbusiness systems and processes, to produce and market a good or serviceaccording to certain specifications. The franchisee usually pays a one-timefranchise 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 decor, (4) detailed techniques in running and promoting thebusiness, (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.

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Usage Example

If you are interested in franchising internationally and already have a large amount of capital, McDonald's Corporation is an option that has been successful for many years.

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