Franchise rights transaction was divided into two sub-transactions: the transaction of right to use the franchising brand and the transaction of right to control the franchisee. The circulation and coexistence characteristics of the dynamic structure of franchise rights transactions and its internal contradictions were analyzed. The asset allocation in the cycle of franchise rights transaction and the dynamic game between franchisor and franchisee were studied. The condition of steady franchising expansion and the generic mechanism that leads to franchising over-expansion was uncovered. The relevant strategies are also given