In franchising, franchisors sell franchisees the right to use their business model. The system enables a business to rapidly expand geographically without having to muster all the resources or assume all the risk. Both of these functions are performed by franchisees, who operate independently and are thus accountable for the majority of transactions. Franchisees benefit by gaining access to a tried-and-true business model complete with all of its performance and distinguishing characteristics (products, trademarks, equipment, processes). The entrepreneurial risk is significantly lower than that of developing a novel business idea independently. Franchisees can benefit from the franchisor's expertise, which may include professional development, extensive process knowledge, and brand spillover. In an ideal world, franchising results in a win-win situation in which franchisors rapidly expand their businesses and franchisees share in their profits.

 When and how to apply Franchising:

 Consider the franchising model if you have already amassed significant assets such as knowledge or brand strength and wish to leverage them in order to grow rapidly while minimizing risk.
Well-known companies that use this pattern are McDonald's and Burger King.