To negotiate a franchise agreement, the potential franchisee needs to fully understand the terminology used in the franchising industry. Often, new franchisees misunderstand the terms ‘Franchise Fee’, ‘Royalty Fee’, ‘License’ and ‘Marketing Fee’. Once understood, the potential franchisee can better negotiate the agreement and furthermore save a significant amount of money over time.
The primary reason for the franchise arrangement is the increased net profit for the franchisee in using the franchiser’s name, logo, brand, or trademark. The franchiser charges an upfront fee called a Franchise Fee, monthly […]