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This is a complicated question. In essence, it will depend upon the level of control a principal has over the other party. I.e. if the principal requires the other party follow a set process and procedure when selling their goods or services, then this is a good indication that the relationship is that of a franchisor and franchisee.
More specifically, if the agreement restricts how goods and services can be sold, how the goods and services can be promoted, whether other goods from being sold, and provides the principal the power to require specific record keeping and the ability to review such records, then these are more likely to be indications of a franchise relationship.
Read our article for more information on franchise relationships and licence agreements.
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