What is franchising according to IFA?

According to the International Franchise Association (IFA), franchising is defined as an agreement or license between two legally independent parties which gives: A person or group of people (the franchisee) the right to market a product or service using the trademark or trade name of another business (the franchisor).

What is a franchise simple definition?

A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.

What is main basis of franchise?

The franchisor licenses its trade name and its operating methods, meaning its system of doing business, to a franchisee, and the franchisee agrees, as their part of the deal, to do business according to the terms of the license.

What are the two 2 types of franchising arrangements?


  • Single Unit Franchise. Single Unit Franchise (or Direct Unit Franchise) is the most traditional and historically the most common form of franchising.
  • Multi Unit Franchise.
  • Area Development Franchise.
  • Master Franchise.

What are the 3 types of franchising and briefly explain their differences?

There are three different types of franchises which you can choose from, they vary in terms of your position, your input into the business and the amount of involvement of the franchisor. The three types of franchises are; the business format franchise, product distribution franchise and management franchise.

What are the two main types of franchises?

There are two main types of franchising, known as Product Distribution Franchising (Traditional Franchising) and Business Format Franchising, which are conducted under a variety of franchise relationships.