What is franchising?
This is a way of organizing entrepreneurial activity, in which an entrepreneur uses a business model formed by working under someone else's brand and makes certain payments for it.
The brand owner is called a franchisor, and the entrepreneur using this system is called a franchisee.
One party (franchisor) has extensive experience, commercial rights and market recognition, and the other party (franchisee) is ready to "rent" all this.
Franchisor is the founder/owner of the franchise, concluding contracts with entrepreneurs wishing to open a business under their own brand in their region.
A franchisee is an entrepreneur who has acquired the right to conduct business under his own brand using an existing business model from another entrepreneur or company.
Franchise - the right to use the trademark, technology and work under this brand.
Lump - sum payment is the amount of money that the franchisor pays to the franchisor (advance payment) as a fee for the use of the franchise.
Royalty - payment of a certain amount of money to the franchisee to the franchisor as a permanent (monthly) reward for the franchise.
Advertising budget - monthly payment to the franchisee to the franchisor for advertising campaigns and marketing activities of the brand.