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Franchising is the practice of the right to use
a firm's
business model
and brand for a prescribed period of time. The word "franchise" is of
Anglo-French derivation—from franc, meaning free—and is used both as a noun
and as a (transitive) verb. For the
franchisor, the franchise is an alternative to building "chain
stores" to distribute goods that avoids
the investments and liability of a chain. The franchisor's success depends
on the success of the franchisees. The franchisee is said to have a greater
incentive than a direct employee because they have a direct stake in the
business.
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