franchise

A special privilege to do certain things conferred by government on individual or corporation, and which does not belong to citizens generally of common right; e.g., right granted to offer cable television service. Artesian Water Co. v. State, Dept. of Highways and Transp., Del.Super., 330 A.2d 432, 439.

In England it is defined to be a royal privilege in the hands of a subject. A privilege granted or sold, such as to use a name or to sell products or services. The right given by a manufacturer or supplier to a retailer to use his products and name on terms and conditions mutually agreed upon.

In its simplest terms, a franchise is a license from owner of a trademark or trade name permitting another to sell a product or service under that name or mark. More broadly stated, a "franchise" has evolved into an elaborate agreement under which the franchisee undertakes to conduct a business or sell a product or service in accordance with methods and procedures prescribed by the franchisor, and the franchisor undertakes to assist the franchisee through advertising, promotion and other advisory services. H & R Block, Inc. v. Lovelace, 208 Kan. 538, 493 P.2d 205, 211.

Term also refers to such business as owned by franchisee. State and Federal laws regulate business franchising.

See also franchised dealer.

See also corporate franchise.

See also charter

- elective franchise

- exclusive franchise exclusive agency)

@ general franchise

@ special franchise

@ general and special franchise

General and special franchise.

The charter of a corporation is its "general" franchise, while a "special" franchise consists in any rights granted by the public to use property for a public use but with private profit.

@ sports franchise

As granted by a professional sports association, it is a privilege to field a team in a given geographic area under the auspices of the league that issues it. It is merely an incorporeal right.

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Tax treatment.

A franchise is an agreement which gives the transferee the right to distribute, sell, or provide goods, services, or facilities, within a specified area. The cost of obtaining a franchise may be amortized over the life of the agreement. In general, a franchise is a capital asset and results in capital gain or loss if all significant powers, rights or continuing interests are transferred pursuant to the sale of a franchise

@ franchise agreement

Generally, an agreement between a supplier of a product or service or an owner of a desired trademark or copyright (franchisor), and a reseller (franchisee) under which the franchisee agrees to sell the franchisor's product or service or to do business under the franchisor's name. State and federal laws regulate the content of franchise agreements

@ franchise appurtenant to land

Usually a franchise is not regarded as real property or land and is not included in the term "tenement;" but it is sometimes characterized or classified as real property or as property of the nature of real property when exercised in connection with real property, and is, in terms, classified as real property, real estate, or land by some statutes

@ franchise clause

Provision in casualty insurance policy to the effect that the insurer will pay those claims only over a stated amount and that the insured is responsible for all damage under the agreed amount. This clause differs from a deductible provision in that the insured bears the loss in every claim up to the deductible amount whereas, under the franchise clause, once the claim exceeds the agreed amount, the insurer pays the entire claim

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