The United States regulates franchising.
Franchising is the practice of the right to use a firm 's business model and brand for a prescribed period of time .. business model. business model. The word `` franchise '' is of Anglo-French derivation -- from franc , meaning free -- and is used both as a noun and as a -LRB- transitive -RRB- verb .. For the franchisor , the franchise is an alternative to building `` chain stores '' to distribute goods that avoids the investments and liability of a chain .. The franchisor 's success depends on the success of the franchisees .. The franchisee is said to have a greater incentive than a direct employee because they have a direct stake in the business .. Thirty-three countries -- including the United States and Australia -- have laws that explicitly regulate franchising , with the majority of all other countries having laws which have a direct or indirect effect on franchising .. Franchising is also used as a foreign market entry mode .. foreign market entry mode. foreign market entry modes