What is a franchisee?

A franchisee is an entity that enters into a business agreement with a franchisor to sell products or services under the franchisor's trademark. This relationship allows the franchisee to leverage the established brand recognition, operational systems, and support provided by the franchisor. In this arrangement, the franchisee typically pays an initial franchise fee and ongoing royalties in exchange for these rights and the use of the brand’s intellectual property.

Understanding this definition is crucial in the context of the franchise model, where the strength of the brand can significantly influence the franchisee's success. The trademark signifies the franchisee's affiliation with the established brand, which can attract customers who are already familiar with that brand, enhancing business prospects.

In contrast, the other choices describe different roles or entities but do not encapsulate the specific function of a franchisee. For instance, a franchisor is the one that grants rights to use the brand, while options describing businesses operating without a brand or referring to manufacturing facilities do not align with the concept of a franchisee, which is inherently tied to operating under a recognized trademark.