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Franchise Fee

  • 07-11-2005 2:07pm
    #1
    PJG
    Closed Accounts Posts: 259 ✭✭


    Hi Folks,

    Currently looking at some franchise opportunities and one of them has an on going franchise fee is 10% of sales. This seems excessive. Would anyone agree?

    I suppose it depends on what your getting for the 10% !!!


Comments

  • #2
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    Usually there is an up-front fee as well, and a yearly minimum.

    It obviously depends on what your getting. And it also depends on what the margins are like. Franchising is all about margins. The gross margins have to be massive for it to work.

    10 percent seems like an awful lot. If you sell 10 euros worth of goods, you will only get to keep 7.40, after you've paid VAT and the fee.


  • #3
    PJG
    Closed Accounts Posts: 259 ✭✭PJG


    yeah I though so too. getting the margin figures later this week.

    cheers


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