A franchise is a type of business model that grants people or organisations the right to operate a commercial venture under an existing brand name.
A franchisee will pay a franchisor a set up fee and an ongoing annual or monthly license fee in order to trade products and services using the business’ name. The fee paid is exchanged for access to things like proprietary knowledge, trade secrets and general processes regarding the marketing and operations of the business.
Franchises can be expensive but are often profitable for franchisees, who benefit from major cost savings in getting the business to market (through proven processes and centralised operations).
However, franchisees are not entitled to claim any ownership rights in the business and cannot customise the services and product that they offer to their customers. Specifications with regards to branding, trading hours and pricing are all decided and enforced (through complex legal contracts) by the franchisor.