Who is the entity that owns a brand and grants licenses to operate it?

The entity that owns a brand and grants licenses to operate it is the franchisor. In a franchising arrangement, the franchisor develops a brand’s system, which includes the trademark, operational procedures, and marketing strategies. They grant rights to independent operators, known as franchisees, to use their brand and business model in exchange for fees and royalties. This relationship allows franchisees to benefit from established brand recognition and support, while the franchisor expands their reach without directly managing each outlet.

In contrast, a franchisee operates under the franchisor's brand but does not own it. The licensee is typically someone who gains rights to use a brand or product but does not operate under the same structured relationship as in franchising. A distributor, on the other hand, mainly sells a company’s products rather than operating retail locations under the company’s brand. Thus, the role of the franchisor is essential as it underpins the franchising business model by providing the brand equity and operational framework that drive franchise success.