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.
Does a franchisee have to pay for R&D costs associated with a new product/service?
The whole point about franchising is that the franchisor is constantly developing and improving the franchise system. These developments and improvements are reflected in the continuing fees that franchisees have to pay to their franchisor, and by changes and updates the franchisor makes to the operations manual. Franchise agreements expressly provide that the franchisor can update and amend the operations manual during the term of the franchise so that improvements can be incorporated.
In most franchises the franchisor will have its own corporate outlet or unit that enables the franchisor to obtain direct experience and make amendments to the system from that experience, but inevitably franchisors do rely on franchisees bringing forward improvements to the system. Again, most franchise agreements specifically provide that franchisees must do this and that the franchisor can incorporate those amendments royalty free into the system.
There may be some exceptions to the concept that franchisees do not pay for R&D, and these would have to be dealt with specifically in the franchise agreement. The most obvious exception may be software developments. Sometimes producing bespoke software can be an extremely expensive business and franchisors do require work in relation to this to be paid for on a pro-rata basis by franchisees in the system.
You might also be interested in
Answered by Phil Archer
Phil Archer writes: The Bounce Back and CIBILs loans brought in last spring originally replaced the Enterprise... read more
Answered by John Pratt
John Pratt writes: First, you have to work out who is responsible for the poor performance because... read more
Answered by Louise Harris
Louise Harris writes: In respect of renewal fees, every franchise is different. Prospective franchisees are guided to... read more
Answered by Alan Wilkinson
Alan Wilkinson writes: An experienced franchisor will know what works and what doesn’t work when marketing its... read more
Exciting Franchise Opportunities
Companies to Consider
£120,000 net profit
In excess of £70,000
Right at Home UK
£1,000-plus per week
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added 2 years ago | 2 min read
Added about 2 days ago | 2 min read
Added about 3 days ago | 2 min read
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
What Franchise Newsletter
Keep up to date with all the industry news