This thesis deals with the topic of franchising in the European Union and the Republic of Croatia and indicates that the franchise way of doing business provides entrepreneurs with opportunities for successful business results for many years now. It is a widespread form of business and makes up a large part of the global business environment and its impact is visible in the creation of new jobs, the development of small and medium enterprises and acquiring new knowledge and skills. The paper deals with the question of why the franchise model in Croatia is considered underdeveloped, the obstacles but also the opportunities offered by this type of business and their analysis, as well as the presentation on the perspective of franchise development in Croatia. In addition, the process of creating a franchise is explained, the advantages and disadvantages of franchising in general are analyzed and insight into legislation that accompanies this business model is given. In addition, the paper provides an overview of the prevalence of the discussed model in European and Croatian markets. Also, the possibilities the franchise offers to the Croatian economy and Croatian entrepreneurs is analyzed and recommendations for further development of franchises on the market of the Republic of Croatia are given. The results of the analysis showed that despite the fear Croatian entrepreneurs have about such business cooperations, in the last few years there has been an increase in the number of franchises in Croatia, but also it seems that with adequate market and regulatory assumptions, a more significant growth in franchising could follow in the future.