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What is franchising?Franchisee
The independent partner who invests to open and operate an outlet to the system's standards, paying fees and royalties to the brand owner.
Where this sits
Franchising is a business model in which a brand owner licenses its brand, operating system and know-how to an independent partner in exchange for fees and royalties. The brand scales through the partner's capital and effort while keeping standards consistent.
In practice
This section summarises United States federal regulation (16 CFR Part 436) as published by the Federal Trade Commission. Rules change and differ by country — check the source before acting. For reference only; not legal advice.
16 CFR 436.1(i) keeps it deliberately short: a franchisee is "any person who is granted a franchise." All the weight sits in what counts as a franchise, not in what the parties call each other.
So the title on your contract decides nothing. If the relationship meets the three-part test in 436.1(h) — trademark association, significant control or assistance, and a required payment — you are a franchisee under US federal law, whatever the document is headed.
Source: 16 CFR § 436.1(h)–(i) — Definitions · Reviewed: 2026-09-02