A special type of agreemeFnt whereby one undertaking (the fran- chiser) grants to the other (the franchisee), in exchange for direct or indirect financial consideration, the right to exploit a package of industrial or intellectual property rights (franchise) for the purposes of producing and/or marketing specified types of goods and/or services. This package typically relates to trademarks, trade names, shop signs, utility models, designs, copyrights, know-how or patents. A franchise agreement usually contains obligations relating to (1) the use of a common name/shop sign and a uniform presentation of contract premises and/or means of transport, (2) the communication by the franchiser to the franchisee of know-how, (3) the continuing provi- sion by the franchiser to the franchisee of commercial and technical assistance during the life of the agreement.
Source: Glossary of terms used in EU competition policy, Antitrust and control of concentrations, European Commission, 2002