A franchise can be a means to commercialise an intangible asset. It refers to a business arrangement where a company (the franchisor) grants another party (the franchisee) the rights to use an established brand, business model and IP in exchange for financial considerations and ongoing support. The intangible assets being commercialised may include trade marks, logos, operating procedures and proprietary knowledge. By entering into a franchise agreement, the franchisor allows the franchisee to replicate and operate its proven business concept. This allows for rapid expansion, risk sharing and leveraging the brand recognition and customer base, while the franchisee benefits from a tried-and-tested business model and support from the franchisor.
« Back to Glossary Index