Franchise

Franchise is a contractual partnership in which a franchisor (brand owner) grants a franchisee (operator) the right to use a business concept, trade name, and operational systems. The franchisee runs the business under detailed guidelines and pays initial and ongoing royalties or fees.

In commercial real estate, franchise is prevalent in retail and hospitality: chains of shops, restaurants, or service outlets expand through independent entrepreneurs operating under identical branding and quality standards. The franchisor retains control over identity, product range, and operations, while the franchisee provides capital and local market knowledge.

Benefits include rapid expansion, shared risk, and consistent quality across locations. Drawbacks are limited autonomy for the franchisee and dependency on the parent company.