Franchising Definition In Marketing. While franchisors must create a profitable brand and business model that can be easily replicated, franchisees must help maintain brand reputation in order for it to retain its value. It is a marketing system for creating an image in the minds of current and future customers about how the company's products.

Franchising can be described as a pooling of resources and capabilities; Franchising is an arrangement in which the franchisor gives the franchisee the right to distribute and sell the franchisor’s goods or services and use its business name and business model for a specified period, and possibly covering a geographical area. For example, a franchise factor of 3 would indicate that the p/e ratio.

The Business Of Franchising. Franchisor authorizes franchisee to sell their products, goods, services and give rights to use. A contractual agreement takes place between franchisor and franchisee.

This type of franchise is more than just a product or service to tell, but instead is an entire business with multiple products and moving parts. Franchising is a business model that combines the best aspects of sole proprietorship and corporate america. A franchise is a type of business that is operated by an individual(s) known as a franchisee using the trademark, branding and business model of a franchisor.