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Forum Newbie
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Last Login: 7/12/2007 11:35:46 AM
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| We bought a franchise for a food store last month. Because the mall is still under construction and the target to open in mid 2008. My question is the franchise fee suppose to be paid without a lease agreement? The franchise fee could have been sitting in the bank earning interest and as soon as we get a lease agreement then we pay. The company that we are dealing with at this time said that we need to pay the franchise fee but agreed to addendum the contract that it will be refundable if we dont get approve for the lease. Is this normal? That will be about 1 year my money will be loosing money.Please help me we feel like we made the biggest mistake in franchising..please anyone can you give us an advice.
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Forum Newbie
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Last Login: 12/21/2007 5:56:25 PM
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| Read your Franchise Agreement! Most Agreements call for the fee to be paid at the time of execution and most fees are fully earned at the time of execution.
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Forum Newbie
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Last Login: 3/26/2008 12:23:09 PM
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| Franchise fees are usually paid on signing the franchise agreement. You then have 30-90 days to negotiate and sign a lease.
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Forum Newbie
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Last Login: 8/23/2008 11:36:45 AM
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Bernadette,
Yes, it is not unusual to pay a franchise fee prior to even locating a site, much less signing a lease. People purchase the franchise to secure the territory. But that is only necessary when the franchise is large and territories are few or when a concept is quickly expanding.
I have seen many people hold off buying the franchise and signing the franchise agreement (they happen concurrently) until they find a location. Of course the franchisor wants the agreement signed and the fee paid right away due to the very good chance a prospect will get cold feet or find a better concept.
Paula Serber
Business and Franchise Loans
619-793-5559
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Forum Member
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Last Login: 6/15/2011 3:16:07 AM
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Forum Newbie
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Last Login: 10/5/2011 4:48:45 AM
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It really depends on the terms of contract.
Some want it before and some after.
It's always worth reading any contractual documentation you have... Twice... Then getting a brief or friend with legal experience to go through it too.
It's never usually a choice to be taken lightly!
Adam C @ what to do when made redundant
redundancy help
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Forum Newbie
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Last Login: 1/28/2012 3:15:22 AM
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The franchise fee could have been sitting in the bank earning interest and as soon as we get a lease agreement then we pay..
Regards,.
immediate annuities
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