A franchise agreement is a legally binding document that describes the terms and conditions of a franchisor for a franchisee. These conditions apply to each franchise, which are generally described in a written agreement between the two parties. Net value: calculation of total value (total assets minus total liabilities). Many franchised brands require a minimum asset in addition to a minimum of liquidity for potential franchisees. Discovery Days: A term commonly used to refer to the time when a franchisor invites a potential franchisee (sometimes several at the same time) to the company`s headquarters to meet with employees and learn more about the company. This is often one of the final steps before the future franchisee makes a final decision on the franchise investment. Senior Care: The industry sector has focused on home care for seniors or services related to senior care. Includes companies that offer non-medical care, with some medical services too. Senior Care has been a very popular and successful segment of the franchise industry in recent years. Franchise fees: part of the initial investment in a franchise that allows the franchisee to use the name and brand image of the franchise.
It is a single tax. Third-party funds: sometimes franchisees choose to finance themselves elsewhere, for example. B a bank or a specialized source of financing. Any organization outside the franchisor that offers fees is a third-party funder. Franchise fees: Most franchisors require a fee to work under their name and using their protected brands and information. This tax is called a deductible fee. Turnover: refers to a franchise agreement that has been terminated, has not been renewed, has been transferred or leaves the franchise business. You may not be ready to buy a franchise yet, but now that you`ve learned these terms, you`re one step closer. Go ahead and dive.
Take a look at the different sectors where you can start your own franchise and discover your next big step. Franchise development: the process of “selling” the admission of new franchisees into a franchisee. Employees with “development” in their title are generally responsible for attracting new franchisees on board; However, the most successful franchise brands generally treat this process less as a sale, but rather as a job interview. You should look for the right fit for them, and you as a potential franchisee. Absentee Property: An option offered by some franchisors that allows a person to own a franchise without being actively involved in the day-to-day operation. If you`re new to franchising and are considering buying your first franchise, there are several terms you need to know to control the search and purchase process safely. Understanding the basic Lingo franchise will help you better understand the ins and outs of franchising, helping them make an educated and confident decision! Validation: part of the “due diligence” when buying a franchise. Call to discuss with existing franchise owners to validate the virtues of the franchise option, as explained by the franchisor.