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What is franchising?

There are many definitions to what is franchising. Is a method of marketing goods and services, etc etc, but the one that concerns us is the popular business use of the word franchise, defined as the business format franchise.

The business format franchise is the grant of a License by one person (the franchisor) to another (the franchisee), which entitles the franchisee to carry on business under the trade mark/trade name of the franchisor and doing so to make use of an entire package (know-how), comprising all the elements necessary to establish a person previously untrained in the conduct of a business to run the business developed by the franchisor under the brand and, after training, to run it on a predetermined basis with the continuing assistance.

Through franchising it is possible to expand a network using the financial and manpower resource of others. However, the franchisor needs to develop an infrastructure to enable it to cope.