Definition: Franchise systems are networks of independent entrepreneurs who practice the same business model and operate under the same brand. The initiator of a franchise system is the franchisor, who contractually obliges his franchisees to use his brand and implement his business model.

The brand and business model are the intellectual property of the franchisor. In exchange for the payment of fees, his franchisees acquire a temporary right of use.

The franchisor can expand geographically via the franchise system, provided that his business model proves to be economically successful. In this case, his franchisees also bear a reduced economic and financial risk, since they, as legally independent entrepreneurs, adopt an already proven business idea and benefit from diverse synergies and experience in the network.