Franchisee

There is a great taco shop about two hours from our house. It’s called Tacoholics, and the green sauce at this place is so good that we’ll happily make the long drive at least once a week so we can slather it on some fresh fish tacos. One day, while gorging, we decide to ask the owner about opening up a location closer to our house. She thinks that sounds like a great idea, and after some carne asada-fueled negotiations, we come to the following terms: we’ll pay her an up front fee for the right to use the Tacoholics name, processes, and menu, but we’ll own and operate the actual location. In addition, we’ll pay a portion of our revenue back to her in royalties as a thanks for letting us use her brand.

Congratulations to us: we’ve just become a Tacoholics franchisee. A franchisee is a person who buys a franchise: the rights to own and operate a business selling another business’s goods or services in return for pre-negotiated fees and payments. The Tacoholics brand owner is excited about spreading her restaurant’s geographic footprint. As the owner of the newest Tacoholics location, we’re just excited to have instant access to all that delicious green sauce.