What should be in the contract
Posted: Sun Jan 19, 2025 3:53 am
Lump sum payment
Many people believe that a lump sum payment is a fee for the right to use a trademark, to work under a specific brand. In fact, a lump sum payment is the cost of “services” that a company provides to a franchisee as part of opening a business: training for the entrepreneur and his team, job descriptions, marketing materials.
The contract must specify the full scope of what the bulgaria whatsapp number data franchisor will provide to the "newbie". For example, that the seller undertakes to train the franchisee's employees, 300 hours are allocated for training, training will be conducted twice a week for 1.5 hours via online communication. So the franchisee will understand, firstly, what he is paying for, and secondly, whether the franchisor has fully fulfilled its obligations.
The fixed amount of the lump sum contribution and the payment algorithm must also be specified - whether it will be a one-time payment or payment in parts and in what periods.
What should not be in a contract
Formulations such as “the franchisor undertakes to train employees”, “the franchisor will provide all job descriptions necessary for organizing work processes” do not include any details and do not describe what exactly the franchise buyer can demand from the seller; such clauses should not be included in the agreement.
Royalty
The moment that many franchisees face and which often leads to the closure of the business is when all profits go to pay royalties. At the same time, even if the point records a loss, royalties must be paid.
Many people believe that a lump sum payment is a fee for the right to use a trademark, to work under a specific brand. In fact, a lump sum payment is the cost of “services” that a company provides to a franchisee as part of opening a business: training for the entrepreneur and his team, job descriptions, marketing materials.
The contract must specify the full scope of what the bulgaria whatsapp number data franchisor will provide to the "newbie". For example, that the seller undertakes to train the franchisee's employees, 300 hours are allocated for training, training will be conducted twice a week for 1.5 hours via online communication. So the franchisee will understand, firstly, what he is paying for, and secondly, whether the franchisor has fully fulfilled its obligations.
The fixed amount of the lump sum contribution and the payment algorithm must also be specified - whether it will be a one-time payment or payment in parts and in what periods.
What should not be in a contract
Formulations such as “the franchisor undertakes to train employees”, “the franchisor will provide all job descriptions necessary for organizing work processes” do not include any details and do not describe what exactly the franchise buyer can demand from the seller; such clauses should not be included in the agreement.
Royalty
The moment that many franchisees face and which often leads to the closure of the business is when all profits go to pay royalties. At the same time, even if the point records a loss, royalties must be paid.