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1 topic availableThe Franchise Glossary
Master the nomenclature of the franchise industry.
5 terms
Ad Fund
A fee paid by franchisees (usually 1-4% of gross sales) to a collective pool for national or regional marketing and brand building.
Franchise Agreement
A legal contract between the franchisor and franchisee that outlines the rights, responsibilities, fees, and terms under which the franchise operates.
Initial Franchise Fee
A one-time payment made by the franchisee to the franchisor at the start of the agreement, granting the right to use the brand and business model.
Royalty Fee
A recurring fee paid by franchisees (typically 4–8% of gross sales) to the franchisor for the ongoing use of the brand, systems, and support services.
Territory Rights
The exclusive or non-exclusive geographic area granted to a franchisee where they can operate and market their franchise without competition from the same brand.
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