Franchise fee

By joining a franchise, an investor or franchisee is able to run a business under the umbrella of the franchise. The franchisee must pay a franchise fee, which may become costly. In the United States, it may amount to thousands of dollars. In return, the franchisee may enjoy the use of the franchisor's system and name for a limited time, as well as assistance. Such help includes location assistance for the outlet. The franchisor may provide initial training and an operating manual. Then the franchisor may also advise the franchisee on management, marketing, or personnel. For example, each ComputerLand store paid 8% of revenue to the company. Through paying the franchise fee and joining an established franchise system, the franchisee may be entitled to significant cost savings from suppliers. However, there are major franchise systems like Quiznos who received rebates from suppliers and did not pass along the cost savings to the franchisee. It is required by law to disclose rebates and related payments that the franchisor might receive from suppliers in the franchise disclosure document. ==Payment Methods for the Franchise==

Fees involved in acquiring and maintaining a franchise include: Lump sum payment When buying a franchise a lump sum payment may be required, encompassing payment for the right to use a product, brand, and business model. Royalties Royalties are periodic payments, often paid monthly, for the continuing permission to use the franchisee's brand and products. The royalty is usually 5-10% of the turnover. ==See also==