Franchise Agreement Definition Short

To take the example of McDonald`s, the estimated total amount of money it costs to set up a McDonald`s franchise is between $1 million and $2.2 million. By definition, franchises have on-going costs that must be paid to the franchisor in the form of a percentage of turnover or turnover. This percentage can be between 4.6% and 12.5% depending on the sector. Note these points when considering entering into a franchise agreement: franchise agreements give a franchisee the rights to use a franchisor`s intellectual property and resources for a fixed period of time. The rights and allowances assigned to a franchisee are very specific and leave little room for extensions or errors….

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