Franchiser

AAA

DEFINITION of 'Franchiser'

A party in a franchising enterprise that ultimately owns the rights, trademarks and proprietary knowledge of the specific business entity. This owner (franchiser) grants the right to operate a branch of the business under the names, brands and all associated aspects of the business to another party (the franchisee) in exchange for an annual fee and a portion of the branch's profits.

INVESTOPEDIA EXPLAINS 'Franchiser'

Becoming a franchiser is a good method for a business with an established brand to potentially expand across different markets and passively earn a good amount of revenues. However, franchisers must be very diligent in assessing potential franchisees and monitoring the quality and performance of existing franchises. Discrepancies of service quality or bad press will not only affect the financial performance of the franchise in question, but will also negatively affect the public's outlook about the entire brand in general.

RELATED TERMS
  1. Goodwill

    An account that can be found in the assets portion of a company's ...
  2. Proprietary Technology

    A process, tool, system or similar item that is the property ...
  3. Franchise

    A type of license that a party (franchisee) acquires to allow ...
  4. Franchisee

    The party in a franchising agreement that is purchasing the right ...
  5. Brand Equity

    The value premium that a company realizes from a product with ...
  6. Trademark

    A symbol, word, phrase, logo, or combination of these that legally ...
RELATED FAQS
  1. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  2. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  3. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  4. What is the difference between perfect and imperfect competition?

    Perfect competition is a microeconomics concept that describes a market structure controlled entirely by market forces. In ... Read Full Answer >>
  5. How difficult is it to understand business analytics?

    In the abstract, business analytics is the study of financial, economic, consumer and production data through statistical ... Read Full Answer >>
  6. At what levels are core competencies required for businesses operating in the primary ...

    Core competencies help businesses understand their best abilities to perform in the market. Primary sector businesses mine ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  2. Entrepreneurship

    Getting To Know Business Models

    Learning how to assess business models helps investors identify companies that are the best investments.
  3. Entrepreneurship

    Is Buying A Franchise Wise?

    If you like being your own boss, this is not the job for you.
  4. Personal Finance

    Share The Wealth With Franchises

    Skip the first step and build off of someone else's successful business model.
  5. Economics

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  6. Economics

    What is Involved in Inventory Management?

    Inventory management refers to the theories, functions and management skills involved in controlling an inventory.
  7. Economics

    What Does Accretive Mean?

    In the business world, accretive most often to refers to additional growth from outside sources.
  8. Economics

    Explaining Prime Cost

    Prime cost is a way of measuring the total cost of the production inputs needed to create a given output.
  9. Economics

    Explaining the Value Chain

    A model of how businesses receive raw materials as input, add value to the raw materials, and sell finished products to customers.
  10. Economics

    What is a Management Buyout?

    A management buyout, or MBO, is a transaction where a company's management team purchases the assets and operations of the business they manage.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center