Who is the franchisee in a franchise arrangement?

• A. A supplier to the franchiser.
• B. The regulatory body overseeing franchises.
• C. The owner of the original business that licenses others.
• D. The owner of each individual branch of the franchise.

Answer: (D)

In a franchise system, the franchisee is the person or entity that actually runs and owns a specific location using the franchisor’s brand and operating system. They purchase the right to operate a unit, manage day-to-day operations, and pay fees or royalties to the franchisor. That makes the owner of each individual branch the franchisee. The franchisor, by contrast, owns the overall brand and licenses it to others; suppliers provide goods, and regulatory bodies oversee but do not own or operate the unit. So the franchisee is the owner of each individual branch.