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Definition

Franchise

Franchise refers to a contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system.

Franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, good will, or patent that the franchisor has developed. Franchising has been prominent in fast-food restaurants, motels, health and fitness centers, auto sales and service, and real estate.


Franchise means the independent owner of a franchise outlet who enters into an agreement with a franchisor.

Webster Dictionary Meaning

1. Franchise
- Exemption from constraint or oppression; freedom; liberty.
- A particular privilege conferred by grant from a sovereign or a government, and vested in individuals; an imunity or exemption from ordinary jurisdiction; a constitutional or statutory right or privilege, esp. the right to vote.
- The district or jurisdiction to which a particular privilege extends; the limits of an immunity; hence, an asylum or sanctuary.
- Magnanimity; generosity; liberality; frankness; nobility.
2. Franchise
- To make free; to enfranchise; to give liberty to.
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