Franchising Meaning: Definition, Examples, and Translations
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franchising
[ˈfrænˌtʃaɪzɪŋ ]
Definition
business model
Franchising is a business model where a company (the franchisor) allows individuals (franchisees) to operate a business under its brand and sell its products or services. The franchisee pays a fee and often a percentage of sales to the franchisor in exchange for access to its brand, marketing, and operational support.
Synonyms
business partnership, franchise system, licensing.
Examples of usage
- Many popular fast-food chains operate through franchising.
- Franchising can be a low-risk way to start a business.
- The franchising model has expanded into various sectors beyond food.
Translations
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Origin of 'franchising'
The term 'franchising' originates from the French word 'franchise' which means 'freedom' or 'privilege'. The concept gained traction in the United States during the mid-20th century, particularly as major corporations sought to expand their reach while minimizing direct management responsibilities. While the roots of franchising can be traced back to medieval times when the king granted rights to certain individuals to use his name and resources, modern franchising as we know it began in the post-World War II era with companies like McDonald's, which pioneered the fast-food franchising model. Over the decades, franchising has evolved into a widely accepted strategy for business expansion across various sectors, from retail to services, allowing entrepreneurs to leverage established brands while minimizing the risks associated with starting a business from scratch.