Although the franchiser and franchisee seem simply as two parties, they are designated with different names in view of their authorities and what they undertake.

Franchisor, Franchiser
It is a person or organization holding the rights of a system and brand and makes such rights available to third party investors through a franchise agreement. Franchiser may be not only the one establishing the system, but also another only authorized to sell franchise rights. Franchiser may have its own store/s or not using the same system. Franchiser undertakes the supports such as research, training, audit etc. the system requires.

Franchisee
It is the independent investor that obtains and exercises the rights of the system and brand for a certain sales-service point and/or site with an agreement.

Area Franchisee
Franchiser transfers certain liabilities and rights of the market to the area franchisee over a certain territory. In some systems, the area franchisee may have some sub-franchisees open a store, and in others it may open stores for itself only. Area franchisee may undertake, in view of the requirements of the system, one or more of the functions of selection of the sub-franchisee, selection of the place of business, audit, supplying commodities etc. like a franchiser.

Sub Franchisee
It is a person or firm who is granted the right to use the system and brand by the area franchisee with an agreement. In some systems, agreement is executed directly between the area franchisee and the sub franchisee, and in some the franchiser becomes a party to the agreement itself.

Master franchisee
It is a person or organization that obtains the utilization rights of a system and brand developed abroad in a certain country. Sometimes only the master franchisee is allowed to open a store, but mostly it is granted the right to its subordinates. In some systems, franchises provided are linked to the master franchisee and in some they are directly linked directly to the center abroad.

Franchise System
It defines all of the rules and duties within the scope of the franchise relationship.  Subjects like location preference, establishment, operating procedures, sales techniques, utilization of the brands, training of the personnel, audit of the store, selection of franchisees, franchise agreement of the retailing business in question are determined.

Outlet, Store
It describes the physical environment used in performance of the retail work. In general, these are structures like department store, store, shop, restaurant, hotel, office, warehouse used in selling product or service. When products or services sold to the customer by orders from the phone or internet, or sent via mail/internet (for example cleaning, nursing, web services etc.) are in question, home, common office, computer, internet, warehouse etc. constitute the store.

Royalty, Lump Sum Fee
It is the price paid by the franchiser to the franchisee to enter the system.

Franchise Fee
It is the amount paid to the franchiser against utilization of the system and the brand by the franchisee in most systems. In general, the monthly or weekly fee may be charged over not only a certain ratio of the turnover or the profit, but also the number of the service unit. A base limit can be imposed for the franchise fee or a monthly fixed payment may be charged.

Advertising Fee
In most systems, a fund is established for overall advertising expenditures from the center, and a contribution fee is collected from the stores. This fee is generally defined in proportion with the turnover.

Source: Franchise&More-Osman Bilge