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Forum Newbie
Group: Forum Members
Last Login: 2/10/2010 12:01:05 PM
Posts: 1,
Visits: 5
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I am reviewing options to the current franchisor/franchisee financial relationship of our system. Ours has 3 main elements, a royalty (5% of all sales), a marketing fee (2 1/2 % of all sales) and commissions on each sale the franchisor places in the local market (varies 18% - 35%).
I'm hoping to learn other methods that are being used out there in the world of franchises.
Thanks for any help,
PB
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Forum Newbie
Group: Forum Members
Last Login: 3/17/2010 1:20:36 AM
Posts: 3,
Visits: 7
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In exchange for the right to use the franchiser name and assistance, you will pay some or all of the following fees.
Your initial franchise fee, which will range from several thousand dollars to several hundred thousand dollars, may be non-refundable. You may incur significant costs to rent, build, and equip an outlet and to buy initial inventory. You also may have to pay for operating licenses and insurance, and a “grand opening” fee to the franchiser to promote your new outlet.
You may have to pay the franchiser royalties based on a percentage of your weekly or monthly gross income. Often, you must pay royalties even if your outlet isn’t earning significant income.
You also may have to pay into an advertising fund. Some portion of the advertising fees may be allocated to national advertising or to attract new franchise owners, rather than to promote your particular outlet.
To ensure uniformity, franchisers usually control how franchisees conduct business. These controls may significantly restrict your ability to exercise your own business judgment.
Franchises in Africa
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Junior Member
Group: Forum Members
Last Login: 2/11/2011 1:41:42 PM
Posts: 11,
Visits: 10
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I'm a small business owner in Troy MI... I suggest that you contact an expirienced attorney with a background in franchise law...if you're serious about understanding the ins and outs of contracts between franchisor and franchisee and how it could affect your ability to do business your way that'd be your best bet. I found my attorney through http://www.myfranchiselaw.com/ but there are a few others... http://www.myfranchiselaw.com/ is the best, in my opinion because of their directory of franchise attorneys searchable by state. Good luck 
*Lindsay*
My Franchise Law
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