Franchising is a business strategy for getting and keeping customers. It is a method of distributing products or services involving a franchisor, who establishes the brands trademark or trade name, and a franchisee, who pays the franchisor an initial start-up fee and annual licensing fees to acquire the right to sell the franchisors goods or services under an existing business model and trademark. Franchising is a network of interdependent business relationships that allows a number of people to share a brand identification, a successful method of doing business, and a proven marketing and distribution system.
Franchising is a contractual relationship between a licensor (franchisor) and a licensee (franchisee) that allows the business owner to use the licensor’s brand and method of doing business to distribute products or services. The franchisor licenses some or all of its know-how, reducing their own risk while expanding rapidly across countries and continents using the capital and resources of their franchisees.
A franchisor’s brand is its most valuable asset, and consumers decide which business to shop at and how often to frequent that business based on what they know, or think they know, about the brand. Great franchisors provide systems, tools, and support so that their franchisees have the ability to live up to the system’s brand standards and ensure customer satisfaction.
Franchising is a sui generis contract which bears the characteristics of several explicitly regulated contracts such as agency, sales contract, and so forth. The regulations concerning these kinds of contracts in Turkish Commercial Code and in Turkish Code of Obligations are applied to franchising.
