Welker will earn about $9.4 million in 2012, but the team and player aim to achieve a longer deal.
"Wes Welker is a remarkable football player for our team and has been a vital component to our offense and special teams since we traded for him in 2007," the team said in a statement. "Utilizing the franchise designation allows both sides more time to try to reach an agreement, which is the goal. Wes remains a contractual priority and we are hopeful that he will remain a Patriot for years to come."
Last season, Welker paced the NFL in receptions for the third time since joining New England, finishing with an AFC-best and franchise-record 1,569 receiving yards on 122 catches and a career-high nine touchdowns.
Welker and Cris Carter are the only players with two seasons of more than 120 receptions.
Only once in his five years as a member of the Patriots has Welker caught fewer than 111 passes -- 86 in 2010.
The 30-year-old veteran has totaled 554 receptions, 6,105 yards and 31 touchdowns in 77 career games with New England.