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Another Name For A Franchise Agreement

Turnover: refers to a franchise agreement that has been terminated, has not been renewed, has been transferred or leaves the franchise business. Conversion: Some franchisors offer entrepreneurs the opportunity to turn their existing independent business into a franchise. In 2005, an updated version of the Measures for the Administration of Commercial Franchise Act was published. [36] Previous legislation (1997) did not specifically appeal to foreign investors. Further updates were made in 2007 with a view to greater clarity of the law. [Citation required] If the franchisor has many partners, the agreement can take the form of a franchise for commercial formats – an identical agreement for all franchisees. Three major payments are made to a franchisor: (a) a brand fee, b) a refund for training and advice issued to the franchisee and c) a percentage of the turnover of each activity. These three taxes can be grouped into a single administrative tax. A “disclosure” tax is separate and is always a “frontal end tax.” Single Unit: A single franchise, unlike multi-unit owners, in which a franchisee owns several franchise units. Franchising is a consistent and lasting replication of a company`s brand promise, and an agreement must describe in detail the many business decisions that go to the creation of a franchise system.

It is complex and, in most cases, a liability contract, which means an agreement that cannot change easily. Franchising is based on a marketing concept that can be adopted by an organization as a business expansion strategy. When implemented, a franchisor licensed a franchisee to sell its know-how, procedures, intellectual property, use of its business model, brand and rights, branded products and services. In return, the franchisee pays certain fees and agrees to meet certain obligations that are typically defined in a franchise agreement. The code also regulates the content of franchise agreements, for example. B with regard to marketing funds, cooling-off period, termination and resolution of disputes through mediation. Franchisor: the name of a company that offers a franchise opportunity as a means of growth. Sometimes referred to as “franchisee.” A franchise agreement is a license that defines the rights and obligations of the franchisor and franchisee. This agreement aims to protect the intellectual property of the franchisor (IP) and to ensure the consistency of the operation of each of its licensees under its brand. Even if the relationship is codified in a written agreement that must last up to 20 years, the franchisor must have the ability to develop the brand and its consumer offering to remain competitive. Acknowledgement: item 23 of the franchise publication document (FDD) signed by the potential franchisee and made available to the franchisor (on paper or electronic form) as proof of the date on which the FDD was received by the person concerned. Advertising costs: the amount the franchisee pays to the franchisor as a contribution to the franchise system advertising fund.

The fund is generally created to pay for the creation and placement of advertising and is used to offset franchisor management costs related to “retail/brand” advertising. Payments are generally calculated as a percentage of gross sales. Agent: a party that has an implicit or explicit power (oral or written) to act on behalf of someone else.