In franchising, the party that operates the business under the franchising agreement is the ______.

• A. Franchisee
• B. Franchisor
• C. Licensee
• D. Distributor

Answer: (B)

The party who operates the business under a franchising agreement is the franchisee. In a franchise setup, the franchisor provides the rights to use the brand, system, and ongoing support, and the franchisee runs the actual store or location, following the established procedures and paying fees or royalties.

The franchisor, in contrast, owns and licenses the overall system to others and typically does not run the day-to-day operations of each location. A licensee might operate under a licensing arrangement that grants rights to use a brand or product, but without the full franchised system and ongoing support. A distributor primarily buys and resells products rather than operating a franchised business. A fast-food chain example shows franchisees running individual restaurants under the brand and system, while the franchisor provides the framework.