Franchise rights refer to an individual or enterprise that owns the ownership of a business system of unique products, equipment, trade patents or service marks, that is, the franchisor, and gives it to other individuals or enterprises, called licensees, in a specific area. The right to conduct business activities in the same industry in a manner specified in advance and for a period of time. Franchise rights generally include three different forms: trademark franchise rights, product franchise rights, and operating model franchise rights.
The form of franchising can be divided into direct franchising and sub-franchising or regional franchising according to the nature of the license. The former means that the franchisor directly grants the franchise right to the franchise applicant, and the franchisee sets up franchise outlets and carries out business activities in accordance with the franchise contract, but the franchisee is not allowed to license others to operate franchised products; the latter means that the franchisee The applicant will grant the exclusive franchise rights in the designated area to the franchisee, and the franchisee can grant the franchise rights to other applicants, or he can open franchise outlets in the area and engage in business activities.
Legal basis: Article 3 of the "Commercial Franchise Management Regulations"
The commercial franchise (hereinafter referred to as "franchise") as mentioned in these Regulations refers to companies with registered trademarks, corporate logos, Enterprises that operate resources such as patents and proprietary technologies (hereinafter referred to as franchisors) license their operating resources to other operators (hereinafter referred to as franchisees) in the form of contracts. The franchisees will operate under a unified business model in accordance with the contract. Carry out business activities under the franchisor and pay franchise fees to the franchisor.
Other units and individuals other than enterprises may not engage in franchise activities as franchisors.