Franchises are one of the most popular ways that people choose to start a business, especially in highly competitive industries. In legal and economic terms, a franchise is a type of license that one of the parties (the franchisee) acquires and that allows them to use a brand and (the franchisor) as well as have access to their knowledge of the market and sell it under their name. .
In exchange for being able to use the franchise name, the franchisee generally pays an initial fee and an annual amount to maintain the license.
Franchises have a series of advantages that starting another business from scratch does not have, such as being able to use the name of a company in many cases known, so that you bet on something that is already known in the market, the know how and the years of experience of the franchisor.
The franchise contract
Franchise contracts are usually complex and vary depending on the market, the type of product or service ... At Franquicy they are experts in the franchise business model and they explain to you what are the necessary clauses of this type of commercial contract, if you want to know them click here and discover all the information about it. Traditionally, the franchise agreement includes three categories or classes of payment that the franchisee must make:
- The use of the trademark
- Payment for training, equipment and business consulting
- The royalties