Under a business format franchise, the franchisees pay royalties for the right to sell the product of the franchisor, but otherwise they have complete freedom as to how they manage their businesses.

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Under a business format franchise, franchisees do not have complete freedom to manage their businesses. They must adhere to the operational procedures and standards set by the franchisor, which includes everything from the products they sell to the way they decorate their stores. While there may be some flexibility in local marketing efforts, overall the franchisor retains a significant amount of control over the franchisee's business operations.

Under a Business Format Franchise, the Franchisees Pay Royalties for the Right