Franchising has its own rhythm.
Its own mindset.
And yes — its own vocabulary.
The problem? Too many aspiring franchisees walk into this world excited, motivated, and ready to go… but unsure about what half the conversation even means.
I’ve seen it firsthand.
Smart, driven people nodding through meetings, afraid to ask what “FDD” or “royalties” actually mean — because they don’t want to look unprepared.
Let’s break that cycle.
Because here’s the truth: understanding the terms of this business helps you understand the rules. And when you know the rules, you can play with confidence.
Let's Break Down The Must Know Terms - Minus The Jargon
This isn’t about memorizing definitions.
It’s about building confidence.
Franchisor vs. Franchisee
The franchisor is the brand builder — they created the system.
The franchisee is the operator — they invest in that system and run a local business.
Think architect (franchisor) and homeowner (franchisee). Different roles, same blueprint.
FDD (Franchise Disclosure Document)
Not just a stack of paperwork. This is the legal and financial roadmap of the franchise.
It tells you how the business works, who’s in charge, what’s expected — and what to look out for.
If you’re only skimming this, you’re flying blind.
Initial Franchise Fee
This is the upfront cost to buy into the brand.
It typically covers:
Use of the brand name
Training and onboarding
Access to the operating system
But it’s just the beginning of your investment — not the whole story.
Royalties
These are ongoing payments you make to the franchisor, often based on a percentage of revenue.
They fund things like:
Continued support
System improvements
National marketing
If the system’s strong, these fees become investments — not burdens.
Territory
This defines your operational “zone.”
You need to know:
Is it exclusive?
Can another unit open nearby?
What’s protected, and what isn’t?
Don’t assume you’re covered — get it in writing.
Turnkey vs. DIY
Some franchises are “plug-and-play” — they’ll help set everything up for you.
Others hand you the blueprint and expect you to figure out the rest.
Know what level of support is included from day one. It’s not all created equal.
Clarity Creates Confidence And Confidence Creates Momentum
You don’t have to know everything to get started.
But you do need to understand the basics — because when you speak the language of franchising, you stop second-guessing and start leading.
So here’s my advice:
If a term doesn’t make sense, don’t fake it.
Ask. Learn. Own it.
Because smart franchisees don’t just buy into a brand.
They invest in their own understanding.
Ready To Explore Franchising? Let’s Talk!
Mack and Sharon Strange are on a mission as Franchise Consultants to help others go from “Start” to “Success” when it comes to franchise ownership.
If you’re curious about exploring franchising as a career pivot, investment vehicle or lucrative side hustle, let’s talk!
You can book a free, no obligation call with Mack here and/or a free call with Sharon here.
As Franchise Consultants, there’s no fee for our services.
Rather, our role is to serve as a trusted guide and educational resource, and we’re compensated by franchisors only if and when you decide to move forward with (and are approved for) franchise ownership.
Lastly, you can learn more about our story and how YOU can follow in our footsteps via the Franchise Together Podcast.
We look forward to connecting with you soon!