July - 2014

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Costs under a Franchise Agreement

Costs under a Franchise Agreement

Costs under a Franchise Agreement The Franchisee needs to carefully consider the additional operational costs associated with running a franchised business. In the development of any business plan, it is essential the Franchisee grasp a complete understanding of those costs because those cost will ultimately eat into the profit margin. We frequently deal with Franchisees who have signed complex agreements without obtaining legal/accounting advice or understanding their true c

Marketing Funds

Franchisees should be aware that in many cases the Franchisee is required to contribute to a marketing fund in addition to paying Franchise fees and also in addition to the payment marketing fund fees under a lease. Typically a contribution to a marketing fund is 2% to 5% of the Gross sales or a minimum amount. A Franchisee may also be required to contribute a marketing fund under a lease of about 2%-4% of the yearly rental. The way in which the Franchisor deals with the mark

It is certainly a tenant’s market

The amount of empty commercial space out there is overwhelming. There are about 395 vacant spaces in the Townsville CBD/4810 area alone according to a leading commercial lease website. I can understand the caution displayed by office tenants and the need to cut office space to lower overheads. It is commercially prudent to grow the business before commitments are made to lease more space. The problem is not overbuilding but the cyclical downturn in demand following the GFC. A

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