Generally speaking, a franchise business has three common factors:

the franchiser is in the business of selling franchises to independent third party local operators to market a product or services under a method created by the franchiser;

the business is based upon a common method or approach, that relies on a combination of techniques or products plus the franchiser's special trademark, service mark, trade name, logotype, advertising, or other symbol that designates the franchiser; and

the franchisee is required to pay fees and conduct its local business in a manner meeting the franchiser's requirements.

Franchise offerings must comply with federal regulations, and, in some cases, with even tougher state regulatory laws. Some states do not require registration based upon the net worth of the franchiser or if the franchiser has a federally registered trademark. Foreign countries also set their own terms and conditions regulating franchising activities.