In retail and services, what business model lets independent operators use another company’s brand and system for fees?

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In retail and services, the business model letting independent operators use another company’s brand and system for fees is franchising.

The franchisor typically grants the franchisee the right to operate under its trademark and business format. In return, the franchisee may pay an initial fee and continuing royalties, and usually follows standards covering products, training, premises, marketing, and operations. The franchisee generally supplies capital and manages the individual outlet.

Franchising is different from ordinary licensing, which may grant rights to use intellectual property without transferring a complete operating format. It is also different from a company-owned chain, where the parent company directly owns and operates the locations. The legal details, disclosures, and required agreements vary by country.

Source: Wikipedia · fact-checked Sept. 2026

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