What is a franchisor?
Last reviewed July 6, 2026
The franchisor is the company that owns the brand and the operating system and licenses both to independent operators. It sets the standards, provides training and support, and collects the initial fee and ongoing royalties. It also holds most of the power in the contract: the operating manual, approval rights over transfers, and termination rights all run in its direction.
A franchisor's economics run on royalties, which means its growth incentive is selling units — not necessarily keeping every unit profitable. That's why the durable evidence about a franchisor is Item 20 turnover and what franchisees say in validation, not the polish of its sales process. Considering becoming one? See how to franchise a business.