Franchise Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Franchise, written in plain English, along with examples of how it is used.

What is Franchise?

History and Meaning of Franchise

Franchise is a business model that has existed for centuries. Essentially, a franchise is a legal agreement between a franchisor (the brand owner) and a franchisee (the investor) allowing the franchisee to use the franchisor's trademark, operating system, and support in exchange for a fee. The concept of franchising began in the 1850s, when Isaac Singer began selling sewing machines through franchising. After World War II, franchising became popular and a legitimate way to expand businesses beyond their regional constraints.

Examples of Franchise

1. McDonald's is one of the most well-known franchises, with over 36,000 locations worldwide.

2. Subway, with its famous "eat fresh" slogan, has over 40,000 locations around the world.

3. 7-Eleven is the world's largest convenience store franchise, with over 61,000 stores in 18 countries.

4. UPS Store is a retail-based packing and shipping franchise that has over 5,000 locations.

5. Anytime Fitness is a franchise fitness center that is open 24/7 with over 4,000 locations worldwide.

Legal Terms Similar to Franchise

1. Licensing Agreement: A legal agreement where the owner of intellectual property grants permission to another party to use that property.

2. Trademark: A symbol, word, or phrase that identifies a product or service and differentiates it from others.

3. Royalty: A fee paid by a licensee to a licensor for the use of their intellectual property.

4. Joint Venture: A legal agreement between two or more parties to work together on a specific project.

5. Distribution Agreement: A legal agreement between a supplier and a distributor to sell products or services.