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How soon after signing the franchise agreement am I expected to pay the franchisor the ‘initial fee’
Usually a franchisee will be required to pay the initial fee in full on entering into the franchise agreement. This is something that will be specified in the franchise agreement itself. The initial fee is payable in respect of the initial range of services that the franchisor provides to the franchisee, as well as a charge for entry into the system. In addition, the franchisee may be expected to pay for an initial package of equipment and/or products or the costs of a ‘turnkey’ fitting out of premises. These additional initial costs can sometimes be combined together in the initial fee and may lead to staged payments being made, for example on the delivery of certain equipment or the completion of certain stages of the fit-out of the premises. Sometimes the initial fee may be paid in instalments. It might be that a proportion is paid on entering into the franchise agreement, but if a franchisee then has to find premises in which to trade from the remainder of the fee is payable on the franchisee acquiring the premises. It may be that some of the initial fee will be payable on entering into the franchise agreement, but that the remainder will be payable after training has been successfully completed.
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Exciting Franchise Opportunities
Companies to Consider
Broadway Wine Company
£648,000 per annum with a gross profit of £108,216 and EBITDA of £82,956 by Year Three
Joint ventures with franchisor
Gross profits exceeding 70%
This would be discussed at interview stage
Jackson Fire & Security
Bark Busters Dog Training
£70,000-plus per annum
Part funding available
Potential ROI within 12 months, with average profits of 34% in the first year
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