AboutMyArea Franchising Explained
A franchise is the right to operate and sell a product or service under license for (normally) an agreed period of time.
The franchisor establishes and sets up the service or provides the product.
The franchisee buys the exclusive right (the "license") to sell the service or product provided by the franchisor usually (but not always) is a defined geographical area (which is how AMA works).
The franchisor provides training, advice, technical and marketing support.
Normally, for this, the franchisor will charge the franchisee to buy into the franchise (for the "license" to operate the franchise) and continuing fees thereafter which could be a monthly charge and/or based on the level of sales generated by the franchisee.