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Your Handy Franchise Dictionary


Franchising termsWhen you’re new to the world of franchising learning to understand the jargon can sometimes feel like trying to learn an entirely new language. It can be intimidating, especially when you’re thinking about investing your hard earned money into a new venture and you feel like you’re not completely understanding all of the conversation. The good news is that it doesn’t take much to learn ‘franchise-ese’ and once you know the language you’ll feel more prepared to tackle the business world. So let’s start with the basics and take it from there.

Franchising Lingo 101:

Franchisor – The Franchisor is the creator and owner of the business format and brand.

Franchisee – The Franchisee is the person, people or company who buys “into” the franchise by paying for access to the franchise (from the Franchisor).

Franchise Agreement – The Franchise Agreement is the contract signed by both the franchisor and the franchisee. The agreement will clearly define all the rights and responsibilities of each party, is usually signed of the day of settlement, and is legally binding.

Franchise Fee – The Franchise Fee is the payment made to the Franchisor by the Franchisee on the date of settlement of the franchise. The up-front fee grants the buyer his or her franchise rights.

Territory – With most franchise agreements you will receive access to a geographical area or “territory” in which you are free to operate the business without concerns about competition from other franchise owners within the same company.  

Greenfield Site – A brand new site of business.

Renewal – A franchise agreement is granted for a limited period of time, after which a renewal will be required.

Code of Conduct – The Franchising Code of Conduct is a mandatory code for the franchising industry that applies to both franchisees and franchisors. The code outlines appropriate behaviours and aims to protect parties from harm. It is regulated by the Australian Competition and Consumer Commission (ACCC).

Disclosure Document – A Disclosure Document is a legal document that must be provided to the franchisee by the franchisor in accordance with the Franchising Code of Conduct. The document will provide in depth information about the franchise system including financing requirements and earnings information.

Due Diligence – Prior to purchase, a buyer must do their Due Diligence, which is a thorough examination of all aspects of the franchise business.

Turn-Key Operation – If the franchise operation is completely equipped, stocked and ready to go it is called a turn-key operation.

Ready to take a closer look at the franchise opportunities available from Kwik Kopy? Contact our franchising team today to find out why we’re one of Australia’s top rated franchises.

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