In late 1800 he became the first official franchisee of General Motors Corporation

began developing franchising in 1902 by Lewis Ligget

He started scribbling the success story of McDonald's in which it stressed quality service cleanliness, and value (QSCV)

the process of developing and distributing a franchised brand and its structure.

gives you access to the trademark, continuous franchisor support. and legal rights to carry out business using the brand's resources in return for your investment.

The agreement or license between two legally independent parties

simply sell the franchisor's products and are supplier- dealer relationships.

franchisor licenses its trademark and logo to the franchisees but typically does not provide them with an entire system for running their business.

not only use a franchisor's product, service and trademark, but also the complete method to conduct the business itself such as the marketing plan and operations manuals. the most common type of franchise

Types of Franchise Arrangements

an agreement where the franchisor grants a franchisee the rights to open and operate ONE franchise unit.

an agreement where the franchisor grants a franchisee the rights to open and operate MORE THAN ONE unit.

two ways a multi-unit franchise can be achieved

A franchisee has the right to open more than one unit during a specific time, within a Specified area.

gives the franchisee more rights than an area development agreement. In addition to having the right and obligation to open and operate a certain number of units in a defined area.

the master franchisee also has the right to sell franchise to other people within the territory, Known as

takes over many of the tasks, duties and benefits of the franchisor, such as providing support and training, as well as receiving fees and royalties.

Includes not only a product, service and trades also the complete method to conduct the business such as the marketing plan and operations

Also known as the Uniform Franchise Offering Circular, the disclosure document provides information about the franchise system.

Describes the relationship between the franchisor and franchisee including use of trademarks, fees, support and control.

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

where the franchisee simply sells the franchisor's products without using the franchisor's method of conducting business

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

one format for the disclosure document which provides information about the franchisor and franchise system to the prospective franchisee.

There are two other popular methods by which businesses expand their market and distribution channels:

• has a contractual relationship with the supplier • buys from the supplier in bulk and sells in smaller quantities • is familiar with local markets and customers • may do business with many companies, more than just the supplier/producer • may not receive contractual support and training from the supplies/producer like a franchisee

Allows a licensee to pay for the rights to use a particular trademark.

are mainly interested in collecting royalties and supervising the use of the license rather than influencing the operations of the business.

The two main franchising legal documents are the:

to provide prospective franchisees with information about the franchisor,

This is a cooling-off period in which franchisors must give prospective franchisees 10 business days to think about their decision

more specific than the UFOC about the terms of the relationship between the franchisor and franchisee