This article emphasizes franchising’s role in marketing and tries to show that franchising is a more rational way of distributing goods than free channcl system which manufacturers have no control on it. In fact, franchising is one of the ways of establishing an organized vertical marketing system and involves a contractual arrangement between origianiting supp-liers (producers) and/or merchant middlcmcn. Franchising can help moving goods more rapidly from producers to consumers at every step in a distribution channel.