Franchise Development Formats and Agreements For the Franchisee
Development formats and agreements in franchising can be divided into two broad categories: Single-unit franchising and Multi-unit franchising Single-unit franchising : an arrangement by which the franchisor licenses the franchisee to operate the business from a single outlet. Single-unit franchising is the most common form of franchise and gives the franchisor the greatest degree of flexibility and control over the franchise system. Multi-unit franchising : an arrangement by which the franchisor licenses the franchisee to operate the business through multiple single-unit outlets based on a development schedule. Multi-unit franchising is becoming more common as it maximizes the franchisee’s profit potential and allows the franchisor to expand the brand in a specific territory. Successful franchisees often look to buy more than one franchise unit from the same franchisor. A multi-unit franchisee may pay an up-front franchise fee (at a discounted rate) for each franchise unit that t...