The main purpose of this article is about defining and interpreting different types of franchising for the effective application in the concrete business conditions. Franchise types can be categorized according to several factors which are distinguished by its components: ← the franchisor's strategy
← the levels of involvement by the franchisor
← the control over franchisees
← franchisee options for expansion in the granted territory ← the type of franchise business
These factors can overlap in many instances, which make it difficult to rely on a single definition for a type of franchise when related to real life examples.
I propose to compare the most common forms in today's business environment. These include Direct and Master franchising. The first case occurs when a franchiser in a country gives franchise rights, along with continuous training and support, to single-unit franchisees. These single-unit franchisees, sometimes called indigenous franchisees, operate in their own countries. A foreign franchiser is in a position to directly support a single-unit franchise from its home country. A foreign franchiser can also provide support by forming a local presence in its host country. Both of these forms are direct franchising; the former is called direct-unit franchising, while the latter is called direct-investment...