Franchiser

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.

BREAKING DOWN '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. Franchise

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

    The party in a franchising agreement that is purchasing the right ...
  3. Franchise Factor

    The measurement of the impact on a company's price-earnings (P/E) ...
  4. Franchise P/E

    The expected value of new business opportunities available to ...
  5. Franchise disclosure document

    A Franchise Disclosure Document (FDD) is a legal document presented ...
  6. Franchised Monopoly

    Monopoly status given by the government to a company. A franchised ...
Related Articles
  1. Markets

    Diamond in the Rough? U.S. Franchises in 2016 (MCD, DNKN)

    Learn about U.S. franchise growth and direction for 2016 and how changes in wage standards and consumer preferences may endanger large fast food chains.
  2. Entrepreneurship & Small Business

    Share The Wealth With Franchises

    Skip the first step and build off of someone else's successful business model.
  3. Entrepreneurship & Small Business

    Is Buying A Franchise Wise?

    If you like being your own boss, this is not the job for you.
  4. Entrepreneurship & Small Business

    When Is A Franchise The Right Investment For You?

    Do you have the right mix of credit, capital and business savvy to make you an ideal candidate for buying a franchise?
  5. Entrepreneurship & Small Business

    What is a Franchise?

    In a franchise, the franchisee acquires access to the proprietary knowledge, processes and trademarks of an established business – the franchisor.
  6. Entrepreneurship & Small Business

    Is Buying A Franchise Wise?

    Before you dive headfirst into buying a franchise, you might want to stop and think.
  7. Insights

    The Cost of Buying a McDonald's Franchise (MCD)

    Setting up a new McDonald’s franchise can cost the owner up to $2.2 million to get the restaurants up and running, but it can be very profitable
  8. Financial Advisor

    What's The Best Franchise Investment For You?

    How do you figure out which franchise is the best for you and your budget? Read on.
  9. Entrepreneurship & Small Business

    Franchise vs. Startup? How to Decide

    For you, self-employment is definitely the name of the game. But which route is better: opening a franchise or starting a business from scratch?
  10. Markets

    Do Fast Food Franchises Mean Fast Returns?

    We look at what it takes to own a fast food franchise: the entry costs, profit potentials, challenges, and sustainability.
RELATED FAQS
  1. What are some examples of different types of business models in major industries?

    Learn what types of business models are currently being used in the marketplace as well as examples of models that work for ... Read Answer >>
  2. Why did Howard Schultz decide to keep Starbucks a chain rather than allow franchising?

    Read about why billionaire Howard Schultz chose to keep Starbucks a chain rather than franchising and how he led the chain ... Read Answer >>
  3. Why is brand equity considered an intangible asset?

    Brand equity is an intangible asset because the value of the brand is not a physical asset and is instead determined by consumer ... Read Answer >>
  4. I'm looking to purchase a franchise and unsure about the questions regarding "total ...

  5. How does brand image and marketing affect market share?

    Building a positive brand image is a must for companies that want an edge over the competition. Learn how marketing and branding ... Read Answer >>
  6. What are some of the benefits of positive brand equity?

    Learn how having positive brand equity enables companies to make a higher margin on sales and spend less money on marketing ... Read Answer >>
Hot Definitions
  1. Poison Pill

    A strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make ...
  2. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  3. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  4. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  5. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  6. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
Trading Center