Transforming Your Business Through Expert Franchise Development
Franchising is a structured, legally binding relationship in which a franchisor grants a franchisee the right to operate a business using its brand, model, trademarks, and systems. In return for an initial fee and ongoing royalties, franchisees receive access to a proven formula, including training, support, and operational guidance.
Though legally independent, franchisors and franchisees operate within standardized systems and shared brand norms. The franchisor also retains oversight to ensure brand consistency and value protection.
Trademark use: This criteria is satisfied when a good or service that is sold or offered by the “franchisee” is associated with the trademark. The “trademark” does not have to be a registered mark, but it is strongly advised that it is. It could be a trade name or a service mark too.
Payment of a Fee: Fee’s represent any and all payments made by a franchisee to the franchisor (royalty, training, marketing, equipment, etc.) The FTC Rule set the base payment at $500. However, some states have enacted laws that have payment ranges from $100 to $1000 for the life of the arrangement.
Control: Exertion of “significant” control over the business, to include providing ongoing assistance or even providing a marketing plan for the sale or distribution of products or services. Basically, a “franchisee’s” reliance on the “franchisor” for business expertise on how to operate the business to reduce risk is considered control.
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