A franchise is a less risky route to starting a business. A franchise agreement allows a businessperson (Franchisee) to trade under the name of an established business (Franchisor). The franchisee pays fees to the franchisor for the right to sell its products or services. This means that the franchisee does not have freedom over the business unlike an independent business. However, a franchisee stands a better chance of success because it builds on the strength of the franchisor’s established brand.
This business model is popular in the food industry among the fast-food chains such McDonald’s, Burger King and among services providers such as car rental companies.
Who invented the franchise? No it’s not Ray Kroc (McDonald’s). The real origin of the franchise is in beauty. In 1882, at age 25, Martha Matilda Harper a domestic servant started manufacturing her hair tonic in a backyard shed…
Watch the real origin of the franchise here: