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A franchisor has 10 UK franchisees, but wants me to contribute to a national marketing campaign. Is
The majority of franchise agreements contain an obligation on franchisees to contribute a marketing levy, normally between one and two per cent of a franchisee’s turnover. This levy is put into a separate marketing and advertising fund and therefore guarantees to franchisees that it can only be used for marketing and advertising. The disadvantage of this system is that payments will be used in ways that may not suit all franchisees. Usually franchisors have discretion as to where the fund’s money is to be used and there is no guarantee that any marketing activities will directly benefit any franchisee. Some franchise agreements do allow for the marketing levy not to be paid until a minimum number of franchisees have been recruited - usually this would kick in at around 10 franchisees. That having been said, franchisors are keen to start building up the fund as soon as possible and there is nothing wrong in a franchisor requiring a small number of initial franchisees to make a contribution to the marketing fund even if, in practice, the payments into the fund would be insufficient to finance any major campaign.
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Mail Boxes Etc.
£100,000 to £120,000
Blossom Home Care
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Yes, via high street banks
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