The most promising type of franchising to date is the business-format franchise. Here, the franchisor, transfers to franchisee a right of using the trademark as well as an elaborate model of organization and conducting the business. The business-format franchising implies franchisor drawing up an extensive package of documents associated with brand lease - the so-called brand-book, which includes detailed technology of managing business and rules, up to the parameters of operating a real estate (location, intensity of flows of people, a range of rental rates, etc. ), interior design of the premises, illumination, furniture arrangement, appearance of employees, the specifics of working with suppliers, advertising policy, etc. As a result, the franchisee is fully identified with the franchisor and actually becomes part of its overall corporate system. In many cases, as for example it occurs in McDonald's fast food networks , franchise outlets are served by centralized supply of products, networks comply with a common approach in terms of process, range, style of service and so on. Exceptions in the form of small deviations from the standard are accepted very seldom. For instance, despite the fact that the worldwide network of McDonald's restaurants product range does not include drinks containing alcohol, in Germany and in the Czech Republic beer is included in the menu because it is an integral part of national culture.
Franchisor under this franchise may be an enterprise producing raw material, manufacturer, wholesaler or retailer, business services enterprise, and can only be the owner of the rights that are transferred to the franchisee according to the agreement under certain conditions. Franchising may be defined as a way of delivering products or services to the consumer, the way of business development and market penetration based on the cooperation of the material and financial resources and efforts of various companies. Franchising may also be considered as an agreement under which a manufacturer or sole distributor of the product or services, protected by a trademark, gives to the independent entrepreneur (retailers) an exclusive distribution rights in the territory of its products or services, in exchange for receiving payments (royalty) from them, provided the compliance with the technology of production and service operations.
For example, in the U.S., according to the experts, to date business format franchising is about 75% of the total number of franchise agreements.