Traditional franchising

The industries in which you most often find traditional franchising include soft drinks,
automobiles and trucks, mobile homes, automobile accessories, and gasoline. The franchisee is
typically selling products manufactured by the franchisor

Business-format franchising

The business-format franchisee gets a complete system for delivering a franchisor’s product or service.
The major difference between a traditional franchise and a business-format franchise is that business-
format franchisees operate their business based on a business system largely prescribed by the
franchisor.

Social franchising
Social franchising is the newest form of franchising. Social franchising is the application of
business-format franchising’s techniques and methods to the delivery of products and services to
address the needs of people who live at the base of the economic pyramid (BOP).

Franchising

Definition: The term ‘franchise‘ is understood as an exclusive right conferred by the parent
organisation to an individual or enterprise to use the former’s successful business model, in
stipulated areas. Franchising is a business relationship; wherein the owner authorises
another party to use their brand, product, business system and process in return for
adequate consideration.

What Is a Franchisor?
A franchisor sells the right to open stores and sell products or services using its brand, expertise,
and intellectual property. It is the original or existing business that sells the right to use its name
and idea. The small business owner who purchases these rights is called a franchisee and the
branch business, itself, is called a franchise.

What Is a Franchisee?
A franchisee is a small business owner who operates a franchise. The franchisee has purchased
the right to use an existing business's trademarks, associated brands, and other proprietary
knowledge to market and sell the same brand, and uphold the same standards as the first
business.