key term - Franchise agreement

Definition

A franchise agreement is a legal contract between a franchisor and franchisee where the franchisor grants the franchisee the rights to operate a business under the franchisor's brand and system for a specified period. It outlines the duties, rights, and obligations of both parties involved.

Related terms

Franchisor:

An individual or company that grants the license to a third party for the conducting of a business under their marks.

Franchisee:

A person or company who is granted the license to do business under the trademark and trade name by a franchisor.

Royalties: A payment made by one party (the licensee or franchisee) to another that owns a particular asset (the licensor or franchisor), for the right to ongoing use of that asset