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    1 Reply Latest reply on Dec 1, 2008 2:00 AM by Lighthouse24

    Is a Franchise a PLC or LTD?

    twinkle9 Newbie
      I was just wondering, when a franchise is set up does it have to set up as a PLC or LTD, or can it be either?
      Also when someone buys a franchise off a franchisor, do they own shares in the business? Or are they just buying a name, etc. to trade under?

      I would be so grateful if somebody could clear this up for me!

      Thank you

        • Re: Is a Franchise a PLC or LTD?
          Lighthouse24 Ranger
          You profile doesn't say, but I assume from the question that you're in the UK. The parent company (the franchisor) may be a PLC or LTD, but the franchisees will normally be sole traders, partnerships, or private companies (LTD, not PLC) depending on the type of franchise and the market being sold to.

          The franchise agreement will carefully spell out all the detailed terms and conditions that answer your other questions specifically -- but in general, the franchisee is licensing (buying the right to use) the tradename, trademarks, etc. of the franchisor. The franchisee profits from operating that licensed/franchised unit, but in most cases would not be an automatic shareholder in the parent (franchisor) company.

          Hope that helps. Welcome to the community and best wishes.