common franchise terms

business format franchise

this type of franchise includes not only a product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals

product distribution franchise franchisor's method of conducting business

a franchise where the franchisee simply sells the franchisor's products without using the

franchise

a license that describes the relationship between the franchisor and franchisee including use of trademarks, fees, support and control

franchising

a method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control

disclosure statement

also known as the UFOC, or Uniform Franchise Offering Circular, the disclosure document provides information about the franchisor and franchise system

UFOC

the Uniform Franchise Offering Circular, UFOC, is one format for the disclosure document which provides information about the franchisor and franchise system to the prospective franchisee

trademark

the franchisor's identifying marks, brand name and logo that are licensed to the franchisee

franchise agreement

the legal, written contract between the franchisor and franchisee which tells each party what each is supposed to do

franchisee

the person or company that gets the right from the franchisor to do business under the franchisor's trademark or trade name

franchisor

the person or company that grants the franchisee the right to do business under their trademark or trade name

royalty

the regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee's gross sales