The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
Do franchisees have to achieve minimum turnover levels?
answered by Vicky WilkesSenior Associate at Squire Patton Boggs (UK) LLP
From the franchisor’s point of view, it is important to have a franchisee who maximises the potential of their respective business in their territory. The inclusion of a provision in the franchise agreement that sets minimum turnover levels is a useful tool for doing this.The British Franchise Association provides guidance that suggests that while minimum turnover levels are permitted, those levels must be reasonable. What is reasonable depends on each franchise - the size and maturity of the franchisee’s territory may be a relevant consideration, for example. It is also in both parties’ interests to set levels that are achievable to incentivise rather than dishearten franchisees.If minimum turnover levels are set, the franchise agreement should deal with what happens if the franchisee fails to meet the set levels. Failure to meet a minimum turnover level should not automatically lead to termination of the franchise agreement and a formal procedure should be included in the franchise agreement allowing the franchisor and franchisee to review performance and agree a reasonable remedial plan.This may grant the franchisee reasonable time to remedy the failure, require the franchisee to attend further training and/or allow the franchisee to continue to operate within a smaller territory. However, if remedial action has been taken and the franchisee still fails to meet minimum turnover levels, it may be reasonable for a franchisor to terminate the franchise agreement.
- Is there a maximum number of times a franchise agreement can be renewed?
- What level of support can I expect from a franchisor?
- Do franchisors ever award more than one trading territory?
- How can I check the financial track record of a franchise business?
- Does a higher investment level mean higher potential profits?
Want to be your own boss? Start today!
A preschool dance program that explores 16 different dance styles ... find out more£4,995 Minimum Investment
Relooking is a beauty franchise, offering a variety of skin care and anti-aging treatments... find out more£18,000 Minimum Investment
Sweets and Treats Vending is a confectionery distribution franchise company... find out more£9,950 Minimum Investment
SuperGreen Solutions is an advisor, supplier, and installer of energy-efficient solutions to… find out more£178,000 Minimum Investment
Enquire now from
You have pending
Here's just five reasons why you should join our FREE newsletter!
New articles added every week
Hand picked franchise opportunities just for you
First class help and advice for franchising and business
We have the industries best contributors on board
Inspiring and insightful franchise case studies