RELATIONSHIP BETWEEN FRANCHISOR AND FRANCHISEE

A business franchise is for the already established business which offers the distribution of its products or services through dealers.

Franchising is a way to execute the business with the help of components of another growing business. In this the franchisor will give rights or license to the franchisee for using his brand name, logo or the product which will build a successful business. For this the franchisor will charge a set of fees as license fee or royalty on its product or the fee depending upon the sales or profit of the business.

There is a relation between franchisor and franchisee which is based on the franchise agreement and also for an exchange for an agreed price, franchise permit to for using the good or services, trademark, brand name and so on. The franchisor will give his rights to the franchisee over the brand name, product or services for the use with the proper agreement and for the growth of his business.

This relationship is basically regulating on the franchise agreement under which all the terms and condition of the business are mentioned and followed by both the parties to the agreement.

As this franchise agreement is a contract between the franchisor and the franchisee which is fully governed by the rules of the Indian Contract Act, 1872 which identifies all the rights and duties of both the parties.