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.
Close
Does a franchisee have to achieve minimum turnover levels?
All businesses have to achieve a minimum turnover level, as there will be a level of sales at which they at least break even. This, however, would do no more than maintain survival level, which would be further influenced by positive or negative cash flow.
It’s possible to far exceed the required level of sales, but if the goods or services aren’t being paid for in time or they’re heavily discounted, the business will run out of money if it exceeds its funding facilities and be forced to close.
Franchisors often set minimum performance clauses in their franchise agreements, which normally refer solely to levels of turnover. The British Franchise Association accepts ‘a requirement that the franchisee’s gross sales in any 12-month period (after their first year) shall at least reach 70 per cent of the average gross sales for the same period of all network franchisees who have been operating for longer than one year’.
Turnover is one thing, but in my view ‘minimum performance’ should include measures such as pricing, profitability and debt collection. These should all be the subject of regular review, best done by the automatic collection of accurate data via a robust franchise management system.
What’s done about poor results? Ideally, they should trigger a review and an agreed training intervention, rather than immediate talk of potential termination.
Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.
You might also be interested in
![Author: Vincent Anthony Author: Vincent Anthony](/images/made/15a98ba108c60ca5852ed10cddec73bd16bc798c.jpg)
Answered by Vincent Anthony
Vincent Anthony writes: The property market has wide appeal because it is relevant to everyone: we all... read more
![Author: Louise Harris Author: Louise Harris](/images/made/81463d158e3d961e27c0ebcdf232b7072d2f3fdf.jpg)
Answered by Louise Harris
Louise Harris writes: Richness or wealth is relative. We always want more, I guess. So, what is... read more
![Author: Shelley Nadler Author: Shelley Nadler](/images/made/30ede99be89f361526162856856bd0d4018f3a4b.jpg)
Answered by Shelley Nadler
Shelley Nadler writes: A concern that businesses may have when deciding to franchise their business, is the... read more
![Author: Alan Wilkinson Author: Alan Wilkinson](/images/made/65741c6bb70d1e745499072da5482c43f7dea846.jpg)
Answered by Alan Wilkinson
Alan Wilkinson writes: There are two elements to consider here. First is the franchise fee itself, and... read more
Exciting Franchise Opportunities
![The Fruit and Veg Man logo](/images/made/images/uploads/companies/Fruit_and_veg_man_75_75_s.jpg)
Start your own The Fruit and Veg Man franchise
Yes
Find Out More£150,000
![The Fruit and Veg Man logo](/images/made/images/uploads/companies/Fruit_and_veg_man_75_75.jpg)
Request Free Information
Send a free enquiry to The Fruit and Veg Man for further information!
![BizSmart® logo](/images/made/images/uploads/companies/BizSmart_(1)_75_75_s.jpg)
Start your own BizSmart® franchise
Yes
Find Out More100,000
![BizSmart® logo](/images/made/images/uploads/companies/BizSmart_(1)_75_75.jpg)
Request Free Information
Send a free enquiry to BizSmart® for further information!
![Mail Boxes Etc. logo](/images/made/images/uploads/companies/Logo_MBE_People_Possible_Swoosh_Black_rgb_75_60_s.jpg)
Start your own Mail Boxes Etc. franchise
Yes
Find Out MoreN/A
![Mail Boxes Etc. logo](/images/made/images/uploads/companies/Logo_MBE_People_Possible_Swoosh_Black_rgb_75_60.jpg)
Request Free Information
Send a free enquiry to Mail Boxes Etc. for further information!
![Mobile App City logo](/images/made/images/uploads/companies/Mobile_App_City_logo_75_75_s.jpg)
Start your own Mobile App City franchise
Yes
Find Out More£100,000
![Mobile App City logo](/images/made/images/uploads/companies/Mobile_App_City_logo_75_75.jpg)
Request Free Information
Send a free enquiry to Mobile App City for further information!
![Business Partnership logo](/images/made/images/uploads/companies/Business_Partnership_new_logo_75_75_s.jpg)
Start your own Business Partnership franchise
Yes
Find Out MoreN/A
![Business Partnership logo](/images/made/images/uploads/companies/Business_Partnership_new_logo_75_75.jpg)
Request Free Information
Send a free enquiry to Business Partnership for further information!
Companies to Consider
![Newsletter Signup](https://cdn.what-franchise.com/assets/images/misc/sidebar-newletter.jpg)
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
-
Why business coaching is a springboard to franchising success
Added 2 days ago | 2 min read
-
How to run a successful dessert restaurant
Added 4 days ago | 2 min read
-
Extra Help targets further expansion
Added one week ago | 2 min read
Franchises by Minimum Investment
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
-
Under 10k
Starting a franchise doesn't have to be costly
Click here -
Under 20k
A mid-range investment for the more experienced
Click here -
Over 50k
If budget is not an issue, then don't miss these.
Click here -
Local Franchises
Find the perfect franchise in a location to suit you
Click here
What Franchise Newsletter
Keep up to date with all the industry news