What Exactly is a Franchise?

What is a franchise?


Don’t worry, this isn’t a ridiculous question to be asking yourself. Sure, you may drive by franchises every day – restaurants and food offerings, coffee shops, etc. – but what exactly are these businesses?

Legally speaking, a franchise is defined as one business owner (the “franchisor”) granting some kind of specified license to another business owner (the “franchisee”). The franchisor licenses everything from its name to its system of doing business to a franchisee, who in turn agrees to own and operate their business according to the license terms; however, this legal definition doesn’t really speak to the heart of a franchise.


A franchise is really about the relationship between a franchisor and its franchisees.  


A franchisor should be there to provide numerous forms of business support to a franchisee, providing the tools for a franchisee to own and operate their business. These tools should include operating manuals, training, guidance on brand standards, quality control, marketing strategies and support, site location assistance, among others. In exchange for this business support, as well as the use of intellectual property, a franchisee typically pays a one-time initial franchise fee – think of the initial franchise fee as gaining access to “the club” – and a continuing royalty fee (which covers the use of the franchisor’s name, operating methods, and continuous business support) – think of this as a membership to “the club.”


What might this franchisor-franchisee relationship look like in veterinary medicine?


While a franchisor and franchisee share a common brand through a contractual relationship, each are different businesses, both practically and legally. A franchisee agrees to manage and operate their business based on the terms of their franchise agreement, while a franchisor works to expand its network of franchisees and support its existing franchisees. For a veterinarian who owns a franchise, this means they are free to operate their practice and practice their medicine while the franchisor supports them with business management and operations support.


If a franchise might be the missing link for you on your journey to practice ownership, feel free to see what we have to offer you!

No Comments

Sorry, the comment form is closed at this time.