A franchise refers to an agreement between two or more persons whereby a franchisor grants the right to a franchisee to operate a business in accordance to the franchise system established by the franchisor during a term to be determined by the franchisor.
Franchise is a fast growing types of business organizations.
It involves the franchisor giving the franchisee the rights to use a mark, or trade secret or any confidential information or intellectual property of the franchisor. This includes a situation whereby the franchisor being a registered user of another person's intellectual property, grants such right to allow the franchisee to use the intellectual property. A franchise is not a service contract, an agency nor a partnership between a franchisor and a franchisee. A franchisee operates the business separately from the franchisor. A franchisor is a person who grants a franchise to a franchisee and that includes a master franchise with regards to the relationship with a sub-franchisee or unless otherwise stated in the Franchises Act 1998.