What is the main purpose of a franchise?

The main purpose of a franchise is to grant a license for merchants to market a company’s goods. In a franchise arrangement, the franchisor provides a business model, branding, and support to the franchisee, allowing the franchisee to operate under the established brand and sell its products or services. This transaction is mutually beneficial; the franchisor expands its market presence through the franchisee's efforts while the franchisee gains access to a recognized brand and operational support.

This arrangement typically includes guidelines for operation, ensuring a consistent customer experience across different locations. It supports brand expansion without the franchisor needing to invest directly in all new locations, thus facilitating growth and increased market penetration for the franchisor.

The other choices describe different aspects of business but do not capture the essence of franchising. For instance, conducting independent research on market trends is a potential activity for a business but not the core of a franchise's purpose. Providing capital for new businesses is often associated with investment or venture funding rather than franchising. Regulating business practices pertains more to governmental functions or industry standards than to the franchise model itself.