Franchise Key:
When you enter the franchising world, there is a jargon… You’ll quickly get used to it, here are some words and expressions to know. Here is the first of three articles in three days.
First of all, « Franchising contract », it’s the document that governs the obligations between the franchisor and the franchisee. A contract must also be carefully read and well understood by people signing and maybe also shown to a jurist.
The « franchisor » is the person or the company that brings for other people or companies a brand, a store or company concept and a know-how in exchange of a financial counterpart and/or supplying and/or exclusivity allowing them to show the profit of the authorization and the helps it gives.
The « franchisee » is the person or the company that uses the brand, the concept and the know-how and engages to respect the counterparts above. He keeps an independent CEO but gets the benefit from a success, an experience, a know-how, and is fully responsible of the well-being of his business.
The « master franchisor » is sometimes the name given to the franchisor that concedes to another person the development of the brand in an area or a country. This person is called “master franchisee†and can be a person or a company that got the right to develop a franchise in an area or a State.
The entry fee is an amount to pay to enter a franchising network as a franchisee. The amount can vary and covers diverse fees.