Franchising is a business format where the party entitled with the concessionaire rights of a product or service grants to independent investors, by agreement, the license to utilize the related system and its registered name for a specific period of time in return for a certain fee, and under specific conditions and limitations by providing know-how for the management and organization of the work.

Master Franchise is the entitlement given by the Franchisor firm to another person or firm for franchising the product or service in a country or a specific region on its behalf. In the Master Franchise format, instead of granting licenses separately to several entities in every other country, the Franchisor firm specifies a master licensee and signs an agreement that entitles the master licensee the right to grant franchising rights in that specific country. The Master License can also cover several countries as well as one specific country.

The Franchisor is the party who holds the concessionaire rights of a system or brand and entitles these rights to third parties through franchise agreement.

The Franchisee is the independent investor who is entitled to specific sales-/ service-point and/or regional rights of a system and brand, and executes these rights accordingly.

This is the fee, which the Franchisee regularly pays to the Franchisor in return for utilizing the system and brand during its operation. The franchise utilization fee is calculated either on a flat-fee basis or by a percentage over the revenue.

This is the start-up fee, which the franchisee pays the franchisor in order to enter the system.