A franchisee refers to an individual or a company that has been granted the right to operate a business using the established brand, systems, and intellectual property of another company, known as the franchisor. This arrangement is established through a legally binding agreement known as a franchise agreement.
The franchisee, in essence, purchases a license to operate a business under the established brand name and benefits from the franchisor's proven business model, expertise, and support. In return, the franchisee agrees to adhere to the predetermined standards, guidelines, and operational procedures set by the franchisor.
As part of this relationship, the franchisee typically pays an initial fee and ongoing royalty fees to the franchisor, which allows them to access the brand name, trademarks, proprietary information, and benefit from ongoing training and support. The franchisee is also responsible for funding the establishment, operation, and day-to-day management of their franchised business.
The franchisee has the advantage of starting a business with an existing and recognized brand name, leveraging the franchisor's reputation, marketing strategies, and customer base. However, they must operate within the framework established by the franchisor, ensuring compliance with standards and rules while contributing to the overall success and growth of the franchised brand.
Overall, a franchisee acts as an independent owner and operator of a business, while enjoying the benefits of a recognized brand and an established system provided by the franchisor.
