A franchisor is a party that grants the use of its business model, products, and trademarked name to franchisees. The franchisor owns the underlying business model and the legal rights to its trademark and products. The franchisor is paid an up-front fee as well as a percentage of franchisee sales. The franchisor is also responsible for maintaining the quality of the products and services rendered by its franchisees, and manages regional and national advertising on their behalf. A franchisor may engage in franchising in order to rapidly build out its business model at a reduced level of investment.

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Franchise Accounting