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What is a Franchise: How Do Franchises Work?

MSA Worldwide

In exchange, the franchisee pays the franchisor franchise fees. The franchise fees usually include a one-time initial fee (franchise fee) and a continuing fee (royalty fee) for the use of the franchisor’s trade name and operating methods. Both mistakes are costly and unnecessary.

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Fifty Shades of Franchising: Differentiating commercial, micro, social, and hybrid franchise models

MSA Worldwide

In Product/Trade Name Franchising (Traditional Franchising), a franchisor owns the right to a name or trademark, licenses the right to use that name or trademark, and generally provides the franchisee with a product that needs pre- and post-sales service.