What is franchising?

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franchising what is it

The functioning of franchising is explained in article 1, law 129/2004:

Article 1, Law 129/2004
Article 1 of Law 129/2004 explains what franchising is: " the contract, however named, between two legal entities, economically and legally independent, on the basis of which one party grants the other, in return for payment, the availability of a set of industrial or intellectual property rights relating to trademarks, trade names, signs, utility models, designs, copyright, know-how, patents, technical and commercial assistance or consultancy, inserting the affiliate into a system consisting of a plurality of affiliates distributed across the territory, for the purpose of marketing certain goods or services "

Definition of franchising
The Treccani Encyclopedia gives the following definition of the word franchising: " In economic language, a system of collaboration between a producer, or in any case an offerer, of goods or services (called franchisor ‹frä′nčai∫ë›) and a distributor (franchisee‹frä′nčai∫ii›), based on a contract according advertising data to which the former grants to the latter the right (franchise ‹frä′nčai∫›) to exploit, under certain conditions and upon payment of a set sum, patents, trademarks, name, sign, or even a simple formula or a commercial secret belonging to him. The system (of old American origin, but spread internationally starting from the Second World War especially in the hotel, restaurant and retail distribution sectors) comes in many varieties of types and categories, but in all cases it establishes a relationship between a producer or service company or wholesaler on one side and distributor on the other (never between wholesaler and wholesaler) ”.