What is a franchise?

A franchise is a business that is part of a system owned by a franchisor. Rather than building their own chain of outlets overseen by managers, a franchisor seeks franchisees to invest in their own outlet, in return for a share in the profits.

Franchisees have the right to use the franchisor’s brand, goods and services for a fixed amount of time, in return for a fee. They are also required to comply with the franchisor’s business format and follow rules set out in a legal contract.

Franchising is hugely popular in Australia – it is worth $173 billion to the economy and employs 574,000 people in 1,267 networks and 94,000 individual franchised outlets.