• Franchising is a legal agreement where a person or group purchases the opportunity to sell or provide services from an established entity. The franchisee, person buying this opportunity, will own a business that sells recognized products or services. Examples of popular franchises include: McDonald's, Radio Shack and 7-11 but can extend to automobile dealerships and other business types. Each business is individually owned and operated but may fall under the umbrella of the same company name, products, services, advertising and reputation.
  
  

Brand Name

• Franchises often come with name recognition. Most franchises are already established and consumers are aware of them and their products and services. Branding is well-known and people may be familiar with the franchise's logos, slogans, sales, print advertising and television commercials. Owning a franchise means less time to build product awareness with the public and, possibly, more imminent sales.
  
  

Costs

• The franchisee pays large upfront costs to the franchiser. In addition, ongoing franchise fees are paid during the life of the business. Fees may range widely and depend on the business type and what the franchise will provide you. It is not uncommon to layout tens of thousands of dollars to the franchiser during start-up. For these costs, the franchise provides assistance with business setup, marketing and advertising services, training and site selection. They may also assist the business owner with obtaining funds and financing.
  
  

Legal Features

• Federal and state regulations require the franchiser to release information about its franchise and its business arrangements with any other franchisers. Franchise Disclosure Documents (FDDs) and Uniform Franchise Offering Circular (UFOC) are documents maintained by the franchisor that contain information about the franchise, company staff, franchise experience, past and current litigation, relationship between franchiser and franchisee and regional rights that meet this requirement. According to the International Franchise Association, as of 2010, 14 states require UFOC registration. In addition, a separate formal franchise agreement is signed between the franchiser and franchisee. This agreement should contain usage of business name and trademarks, location agreements, terms, fees and duties of both parties.