What is "Franchise" meaning?

A franchise is a type of business model where an individual or group (the franchisee) purchases the rights to operate under the branding, business structure, and operational support of a larger company (the franchisor). This model enables rapid expansion for the franchisor and offers the franchisee a proven framework to build a business.

It's widely used in sectors like food service, fitness, and even digital education platforms.

Example

“She opened a digital marketing franchise, benefiting from an existing brand reputation and ready-to-use tools for client acquisition.”

How is "Franchise" used in business?

Franchises allow businesses to scale quickly while minimizing risk for both parties. In return for an upfront fee and ongoing royalties, franchisees gain access to established processes, training, and marketing support. For digital entrepreneurs, franchising models are emerging in areas like online tutoring, consulting, and SaaS tools.

Pro Tip

Evaluate the franchisor's support systems, brand recognition, and digital infrastructure before investing in a franchise opportunity.

Related Terms

Business Model, Licensing, Royalty, Brand Equity