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Franchise vs Dealership vs Distributorship: Key Differences

By Franchise Fee · Updated October 2026

Franchise

A franchise is a licence to run a business under another company's brand and system. You follow its operating standards and receive training and support, in return for fees and often royalty.

Dealership and distributorship

A dealership authorises you to sell a company's products, common in vehicles and appliances. A distributorship buys stock in bulk and supplies retailers in a territory, earning a trade margin.

How to choose

Choose a franchise if you want a ready operating system and brand identity. Choose a dealership or distributorship if you want to sell products with less system control. Read the agreement for targets, territory and exit terms.

This guide is general information, not legal or tax advice. Check current rules with a qualified professional.

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