do franchises have to give their profits to someone else.
2007-05-22 19:11:57 · 3 answers · asked by Dodgerblue 5 in Business & Finance ➔ Small Business
Generally speaking (and details vary considerably), the franchisor will assign the franchisee (you) a location or an operating territory (the latter may or may not be exclusive) and train you on the basics of doing whatever it is you are planning to do. For that, the franchise will ask you to pay a fixed annual fee and/or (usually, and) a percentage of your top line (NOT profits).
Typically, the franchise will mandate that you sell certain products or services, that your location is open during certain hours, and a lot of things of similar nature. While the franchisor cannot require that you buy supplies from them, they can require that certain supplies must bear their trademark (which in practice amounts to the same thing; you buy overpriced supplies from your franchisor).
2007-05-22 20:38:50 · answer #1 · answered by NC 7 · 1⤊ 0⤋
Hi there. Some franchises will want a cut of your profits and some will just want a set monthly fee. The set monthly fee is by far the best as they never know what you earn. Do loads of research before you buy a franchise. There are some terrible ones out there. Do a search in google and it should turn up some site that review franchises etc Best of luck
2007-05-23 02:17:59 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Yes. A portion of your branch's salary will go to the "mother" branch. Franchises are the fasting growing bussinesses, but they have many guidelines that you must abide by. For example, if you were going to start your own Mickey D's, you'll have to make Big Mac's exactly the way all the other Mickey D's do. Also, you have to make sure that your branch is clean and apt for operation...or else the big boys will close you down...and you may be fined by the mother company for making them look bad.
Best of luck to you!
2007-05-23 02:30:15 · answer #3 · answered by ? 3 · 1⤊ 0⤋