A franchise is a way in which it is possible to run a business under an already well-known brand. By buying a franchise, you continue to operate at your own risk, with your own resources as before. The difference between classic business and franchise business is that it operates "under someone else's name". The term franchise appears in the 19th century, more precisely in the 90s of the 20th century. The word franchise comes from the French word franchir which in translation means-to liberate. Today, the word Franchise means that the existing company cedes the right to sell for a fee, where by signing the contract the company undertakes not to give anyone similar or the same rights. Franchises are divided according to the type of activity, according to the type of know-how that is transferred to the franchisees, according to the organization of the franchise and the like. A franchise agreement is an agreement where the franchisee undertakes to apply the assigned rights as stated in the agreement. He also undertakes to pay compensation and that he will not use the rights assigned to him outside the contract. The contract agrees on the fee by putting in the scale of the service and the transferred knowledge with the market value of the franchise. The fee is paid in installments for the duration of the contractual relationship. Franchise business in Croatia appeared in 1969th with the appearance of the Diners Club International card. The Law on Trade regulated the Franchise Agreement for the first time. By regulating that law, the notion of franchise from the contract "disappeared". The franchise agreement is not fully defined so the European Code of Ethics for Franchising applies.