What does it mean to be a franchisee and a franchisor?

Question

Also, what do these people do? What is the purpose of a franchisee and a franchisor?

In: 1

Answer 1

Franchising is a method of starting, running, and expanding a business. In this case the franchisor creates the initial business, trademark, business processes, etc. The franchisee, who owns a particular store, then pays a fee to use these things for that store.

For the franchisor, this arrangement allows them to expand more rapidly and with less risk than if they directly owned each store. For the franchisee, it streamlines the start-up and operation of their business, since someone else has done that work for them.