WHAT IS A FRANCHISE?

A franchise is the agreement or license between two legally independent parties which gives a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor).

The franchisee is able to market the product or service using the operating methods of the franchisor. Moreover, the franchisee has the obligation to pay fees to the franchisor for these rights, and the franchisor has the obligation to provide rights and support to franchisees.

A franchise is basically duplicating the same business again and again. If you are buying a non-franchised business, you will be the only location with your exact name, exact product, menu etc. Your money making potential will be dependent on many factors, such as possibly your location, the amount of out-of town traffic, the brand recognition of the local community, etc.

In a non-franchised business, if you are not on a major freeway or road, you will most likely be limiting your customers to local people who already know who and where you are. Out of town visitors, for example, will typically visit establishments they are already familiar with.