Franchising is a type of business partnership where one company (franchisor) transfers the right to use its trade mark, marketing and technological knowledge, as well as know-how to another company or individual (franchisee). The right to use the trademark and professional knowledge is regulated through a franchise agreement.

Franchising gives an entrepreneur the opportunity to earn money by acquiring ready-made business technologies; on the other hand, franchising allows a businessman to develop an already stable and profitable business with a minimum of investments by selling the right to use his trademarks and unique knowledge to other entrepreneurs.

When signing a franchise agreement, a franchisee not only gains the right to use the trademark and expertise in the realms of production, technology, and the concepts for conducting business, but also undertakes the obligation to strictly adhere to the rules established by the franchisor for conducting the business.

Starting a franchise business, the franchisee significantly lowers the investment risks by using a widely known trademark and repeatedly-tested and well-established technique for conducting business. The amount the entrepreneur pays for the right to use the brand and technologies is much smaller than would be required to create and build a business from the ground up.

Franchising is regulated by chapter 54 of the Civil Code of the Russian Federation