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

• disclosure statement

  Also known as the BDM,or Franchise Disclosure Document, the disclosure document provides information about the franchisor and franchise system

• BDM

  The Franchise Disclosure Document, BDM, is the format for the disclosure document which provides information about the franchisor and franchise system to the franchisee

• franchise

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

• 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

• franchising

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

• franchisor

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

• product distribution franchisee

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

• royalty

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

• trademark

  The marks, brand name and logo that identify a franchisor which is licensed to the franchisee