The definition of a franchise would be something like this. Franchising is the practice of using another firm's successful business model. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.

Except in the US, and now in China (2007) where there are explicit Federal (and in the US, State) laws covering franchise, most of the world recognizes 'franchise' but rarely makes legal provisions for it. Only Australia, various provinces within Canada, France and Brazil have significant Disclosure laws but Brazil regulates franchises more closely.

Where there is no specific law, franchise is considered a distribution system, whose laws apply, with the trademark (of the franchise system) covered by specific covenants.

To make it simpler for the Google reader to absorb, the franchise business model is designed to allow anyone with the desire, and the adequate capital needed for a business startup, to find an already branded business, like Subway, and buy into the business plan. This concept is a very sound business plan and in todays market place, there are literally millions of franchises to take advantage of.

The obvious benefits are buying into al existing well branded business, corporate guidelines to follow, advertising media locked firmly in place, legal representation easy to find and training in the business operation on an ongoing basis. Successful entrepreneurs will make every effort to keep within the guidelines of the corporate profile when operating any business franchise.

There are excellent franchise alternatives available as well. Often times, big franchise business opportunities are too expensive and time consuming for people to pursue. Franchise 2.0 may be the answer for those types of individuals.