“Franchisors” offer and sell franchise opportunities to prospective “franchisees”. A Franchisor, pursuant to an FDD, offers and sells franchises whereby a franchisee is granted the right and obligation to establish a franchised location using the franchisor’s systems, know-how and licensed marks. A Franchisee, through a franchise agreement, is granted the right and obligation to establish and operate a franchised location. Franchisees typically pay franchisors a one-time upfront franchise fee and ongoing royalty fees.
Below learn more about the role of the franchisor, the role of the franchisee and the differences between franchisors and franchisees.
The franchisor is typically an entrepreneur who has laid the groundwork to create a successful, established business. He or she brings the following valuable assets to the franchisor/franchisee relationship:
Essentially, a franchisee’s role is to duplicate the franchisor’s successful business model in order to help it expand into a regional or national market. It is not a passive role, by any means, and requires significant investment and work, including:
Before starting a franchise or purchasing a franchise, it is critical to understand the role of both parties in the franchise system. To learn more about franchising, contact the Internicola Law Firm, P.C. today.
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