Currently, franchising is becoming more and more in demand in various sectors of the economy. Operating under a well-known brand provides an opportunity to expand its presence in various markets, opens up access to an increased range of services provided through ready-made schemes and client programs, and supports business and the quality of services provided. This type of business is particularly successfully used in the service sector: tourism, hospitality, entertainment, consumer services, leisure, catering. The manufacturing sector is less attractive for franchising due to high costs and long payback. The article examines the concept and history of franchising development, identifies the advantages and disadvantages of the franchise system for certain types of services, and analyzes franchise cooperation. The main trends in the use of franchising in Russia are highlighted. The authors conducted a theoretical and methodological analysis of the use of franchising in various types of services, highlighted the problems that arise when using franchising by Russian companies. Examples of the use of franchising in the hotel and tourism business from Russian and foreign practice are given. The article focuses on the complex of organizational, economic, managerial and financial relations that arise between the subjects of franchise agreements in the service sector, as well as government regulatory authorities. Proposals have been developed to improve the process of applying franchising and franchise relations by Russian service organizations in the realities of the modern economy.