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As a franchisee, am I obliged to purchase a minimum amount of goods from my franchisor?
All the obligations that both a franchisor and franchisee are bound by should be set out in the franchise agreement. The franchise agreement itself will specify whether or not there is a minimum level of goods to be purchased. In a usual franchise agreement I would expect to see at least an obligation to use best endeavours to carry on the franchise business. In some franchises, this general obligation is made specific by the setting of minimum purchase commitments. Almost all franchise agreements will require you to purchase the key products for the franchise from the franchisor or the nominated suppliers. Although this might appear to be a tie, in fact it ensures that the franchised product is consistent across the network - a key feature for branded franchises. A prudent franchisee should always check the terms of a franchise agreement and also take legal advice before agreeing to enter into it. If the minimum obligations are too high the franchisee might end up in breach of the agreement.
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Exciting Franchise Opportunities
Companies to Consider
Fresh Car Valeting
Stagecoach Performing Arts
35% to 40% profit, depending on the business model
14-18% net profit
Yes via third parties, both bank finance and asset finance
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