Business Format Franchising Law and Legal Definition

Business format franchising refers to an arrangement where a franchisor teaches to the franchisee the entire businesses format. The business format taught by the franchisor includes marketing, selling, inventory, accounting and personnel procedures. Through business format franchising the franchisor licenses the franchisee to use the franchisor's product, service and trademark and provides a method or system for running the franchised business based on prescribed operating practices. Furthermore, the franchisor provides support via training and communications for the duration of their business relationship and exercises control over the uniformity and quality of the operation.