When I joined the military, I had to learn a lot of jargon - FAST. Confusion was rampant until I understood it. To help you better understand franchising, here are some commonly used terms.
To start, let’s distinguish between who is the FRANCHISEE and who is the FRANCHISOR.
The franchisee, or ZEE for short, is the person or business entity that owns the local franchise. This person was awarded TERRITORY, usually a defined geographic area.
Once the person pays the one-time FRANCHISE FEE and signs the FRANCHISE AGREEMENT, he or she becomes a franchisee or OWNER.
The franchisor, or ZOR for short, is the company that owns the intellectual property and business format of the brand.
When people are learning about what a franchise offers, they are referred to as “FRANCHISE CANDIDATEs.”
The learning process is called the “DISCOVERY PROCESS” or the “FRANCHISE GRANTING PROCESS.”
Other common franchise jargon is covered in this Franchise Alert. Check it out!