Franchisee

A franchisee is an individual or business entity that purchases the right to operate a franchise location under an established brand's system, trademarks, and business model. The franchisee invests their own capital to build and operate the location, assumes all business risk, and pays ongoing royalties and fees to the franchisor. In exchange, the franchisee receives a proven operating system, brand recognition, training, ongoing support, and access to the franchisor's supply chain and marketing programs. Franchisees are independent business owners, not employees of the franchisor, though they must operate within the system's rules and standards. The franchisee-franchisor relationship is defined by the franchise agreement and governed by both federal and state franchise laws.