Franchise Terms Glossary

As you begin your franchise journey, you’ll hear the terms below over and over. Making yourself familiar with the definitions will help to avoid possible confusion or miscommunication. 

• Franchisee: The individual or business buying and operating the franchise.
• Franchisor: The company offering the franchise opportunity.
• FDD (Franchise Disclosure Document): A required legal document disclosing key details about the franchise.
• Royalty Fee: Ongoing fee paid to the franchisor, often based on revenue.
• Territory: The geographic area where the franchisee has exclusive or protected rights.
• Discovery Day: A formal meeting at the franchisor’s headquarters to learn more about the brand.
• Turnkey: A business that’s ready to operate immediately upon opening.

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