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What exactly is an automobile franchise?

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Independent businesses exist all throughout Florida. These entities are unique and are generally stand-alone businesses that are run by individuals, partners, or groups. The owners may have multiple locations for their businesses, but as long as they own each individual business, their entities will not be considered franchises. That is because franchises have a very different business structure.

If a business owner allows a different party to open another site for their business and use all of the intellectual property distinct to their business, then the new site may be considered a franchise. Franchises are set up through licenses, and an owner who allows a franchise to be created is called the franchisor. The individual that sets up the new business under the rules of the original is called the franchisee.

Franchisees are often limited in how much say they have in how they run their franchises. The franchisor may mandate how the sites are decorated, what they can sell, how employees may dress, what supplies are used, and more. When it comes to automobile franchising, franchisees may be limited in how they perform the operations of their businesses, how training is performed for employees, and other important business-related tasks.

It is often the case that a franchisee must pay their franchisor for the use and benefit of the franchisor’s business name. Through their license agreement, the franchisor and franchisee have a financial and legal connection that must be maintained for as long as the franchise stays open. When considering the benefits and drawbacks of opening automobile franchises in Florida, readers can always direct their questions to lawyers who work in this unique field of law.