HOW TO BE A FRANCHISOR IN UNITED STATES

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Listed below is a breakdown structure of how a franchise works:

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• Franchise fees: it’s quite expensive to start a franchise. We have some cost you will have to pay which includes:

 

1.  Franchise fee: this is a one-time start fee that always ranges from $10,000 -$50,000. It depends on the type of franchise.

2. Advertising fees: This fee is around 1% -3% of the monthly gross sale. But, not all franchises charge an advertising fee.

3. Royalty fee: This depends on the terms of the agreement with the franchise. It’s to be paid on a monthly or quarterly depending on your gross sale and it also depends on franchise industries and can range from 4% - 9%.

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• Franchisor Controls: this is an agreement document. As a franchisee, you will need to sign these agreement documents and this will dictate what, when, where and how to conduct the business. Let’s go through some of the contractual controls stipulated by a franchisor:

 

1.  Method of operation: The business hours, where to get goods and products, how the business works are all dictated by the franchise

2. Design and logo:  The franchise logo and design must also be the same with other locations and also if the design is outdated, you will have to pay for repair.

3.  Franchise location: A well-researched survey is conducted to ensure that a particular location is suitable for the business

4.  Goods and services sold: the goods and services to be sold will also be determined by the franchisor.

 

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