Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and a franchisee that allows the franchisee to operate a business developed by the franchiser in return for all rights for operations.

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Franchising does involve a contract between a franchiser and a franchisee allowing the franchisee to operate a business using the franchiser's brand and business model. However, the franchisee typically pays a franchise fee and ongoing royalties, and receives not just the rights for operations but also access to the franchiser's entire business system, including marketing, training, and proprietary knowledge, which goes beyond a simple licensing agreement.

Franchising Is a Variation of Licensing Strategy in Which There