Franchising - a system in which semi-independent business owners (franchisees) pay fees and royalties to a parent company (franchisor) in return for the right to become identified with its trademark, to sell its products, or services, and often to use its business format and system.

Product distribution - a franchisor licenses a franchisee to sell its products under the franchisor's brand name and trademark through a selective, limited distribution network.

Pure - a franchisor sells a franchisee a complete business format and system.

Trade-Name - a franchisee purchases the right to use the franchisor's trade name without distributing particular products exclusively under the franchisor's name.

Ten Myths of Franchising:

1. Franchising is the safest way to go into business because franchises never fail.
2. I'll be able to open my franchise for less money than the franchiser estimates.
3. The bigger the franchise organisation, the more successful I'll be.
4. I'll use 80 percent of the franchiser's business system, but I'll improve upon by substituting my experience and know-how.
5. All franchises are the same.
6. I don't have to be a hands-on manager. I can be an absentee owner and still be very successful.
7. Anyone can be a satisfied, successful franchise owner.
8. Franchising is the cheapest way to get into business for yourself.
9. The franchiser will slve my business problems for me; after all, that's why I pay an ongoing royalty fee.
10. Once I open my franchise, I'll be able to run things the way I want to.