The work provides the basic knowledge and principles of operation of the franchise business methods. In theory explains the path which leads to a formation of franchise system, from creation of conception to signing of franchise contract. The introduction captures dedicate to development of franchising from the very beginning, explains the basic concepts and the nature of franchise, advantages and disadvantages that brings stakeholders and briefly describes the legal environment in Czech republic. The following is a detailed description, step by step, leading to a creation of a franchise system and signing of franchise contract. The work deals with the content of franchise agreements, clarifying the role of franchise associations and Ethical Code in developing this type of business.