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How To Evaluate Franchise Opportunities
Like any other investment, purchasing a franchise is a risk. When selecting a franchise, carefully consider a number of Read more...
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How To Get Into A Unique Franchise Business
Water for humans means life. Unfortunately, not everything about water is good for life. Too much water especially those coming from natural disasters and unavoidable circumstances can be disastrous Read more...
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Club 50 Fitness Kicks Off Franchise Ad Campaign
Club 50 Fitness announced today the launch of its franchise opportunity website advertising campaign. So far, contracts have been signed with Franchise.com, Franchise Gator, and Franchise for Read more...
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Why Do Franchise Owners Pay Franchise Royalties?
A owner is a person who gives his right of marketing and selling, to a third party (franchisee) under his trademark label. The franchisee will continue his business of marketing and selling after becoming a group member and will receive valuable training, support and technical assistance from the franchisor. The franchisee then pays a fee to the franchisor for his support and rights. The relationship between a franchiser and a franchisee could be described as:“A fee given by a Franchisee to a franchisor for the training, advertising & marketing, trademark & other facilities given”. This fee is normally identified in business terms as a “Royalty”. This is a regular payment made by the franchisee to the franchisor therefore creates a legal relationship between the two parties. To grow and be successful and continue in business for years to come, the relationship between the franchisor and franchisee needs to be good and strong. There should be a franchising document drafted by a lawyer, read, and understood by both the parties who enter into the agreement. Typical details that should be in the document are:·Terms of the type of business.·Trade mark policies.·Payments by franchisee to franchisor.·Termination procedures and policies.·Rights and obligations/procedures and restrictions of both the parties. · Duration of the franchise.·Technical support rendered.·Transfer details of the to another party.·Territory and geographical location.·Costs.Other details, specific to the business, could also be added by the parties. The document should comply with the legal requirements of the national company law. Both the franchisor and the franchisee have obligations and rights.The rights of a franchisee.·The franchisee needs to understand the type of business and the background of the market.·A franchisee has the right for technical support, training, development assistance.·The franchisee needs to receive Market information, advertising support and field support from the franchisor.·Rights when a relationship is ended.·A potential franchisee has the right to see records such as balance sheets, and income statements of other franchisees to gain knowledge about the business as well as the franchisor.The information a potential franchisee would like see includes:·Increase in Current assets.·Positive cash balance in a bank account.·Positive stock level.·Increasing
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