Franchise is a way of expanding business, product and service distribution offering a possibility to conduct business under recognizable name claiming to existing if following three requirements are met: 1) an entrepreneur allows the usage his own name, 2) an entrepreneur allows usage of his own business system and 3) an entrepreneur gains profit in form of fees, while enetering the contract and for the time the contract is valid. A number of various theoretical directions are used to define reasons for using franchise business, relationships between the businesses in the franchise business as well as the reasons for using franchise as a method for business expansion. Theories explaining franchise business can be deemed accordingly whether they refer to a company that is a franchiser, to franchising system or to the milieu in which the franchise system does business. The results of the last franchise business research pose new research issues and initiate using of new theoretical directions for defining franchising as a method of entrepreneurs expansion. PUBLICATION ABSTRACT