- Franchising has become a major sector of the US economy, with annual sales of over $1 trillion and accounting for 44% of total retail sales. More than 3,000 franchisers operate over 350,000 franchised outlets in the US. - Under a franchise agreement, a franchisee pays fees and royalties to a franchisor in exchange for using the franchisor's brand name, business model, and other resources. This provides franchisees with training, branding, and an established business system. - While franchising offers benefits like brand recognition and support, there are also drawbacks such as high startup costs, contractual restrictions, and ongoing royalty fees for franchisees. Prospective franchisees must