(Seltz, 1982).
Khan (1992) approached franchising in contractual term as he described that franchising is a legal agreement between the franchise and franchisee in which an owner (Franchisor) agrees to grant rights or privileges (licence) to someone else (Franchisee) to sell the products or service under set specific conditions. Moreover to the definition suggested by Khan, International Franchise Association (IFA) demonstrated the fact that the franchisee must make an investment in the franchised outlet, and the franchiser has the obligation to provide a continuing support to the franchisee's business. IFA adopted Housden's definition of the franchising operation:.
Franchise operation is a contractual relationship between the franchise and franchisee in which the franchiser offers or is obligated to maintain a continuing interest in the business of franchisee in such areas as know-how and training, wherein the franchisee operates under a common trade name, format and/or procedure, owned or controlled by the franchiser, and in which the franchisee has or will make a substantial investment in his business from his own resources. (Housden, 1984).
In accordance with definitions provided so far franchising is a legal and a commercial relationship between the owner of the trademark and an individual or group seeking the right to use that identification in a business. It is a way of distribution in which the franchisor gives the franchisee the right to use a brand name and a business concept with a degree of obligation in order to achieve standardisation. The definition by the US Government's Small Business Administration explained the business expertise provided from the franchisor including marketing plans, management guidance, financing assistance, site location, training and et cetera. Especially, in case of food service industry, the franchisor will be administrating the general food service operation and restriction on issues including food quality control, recipe management, facility management, training, education, marketing, promotion, menu management, service management, outlet management, customer management and so forth (Lim et al.
