What does the initial fee mean?

Franchise fee is a unique form of commercial operation. It means that the brand holder grants intangible assets such as intellectual property rights (including inventions, patents, trademarks and copyrights), organizational management assets, market assets and human assets of the enterprise brand to franchisees in the form of contracts, and franchisees engage in business activities under a unified business model according to the contracts and pay certain fees to the brand holder.

The expenses are included in the initial expenses.

I. Deposits:

In order to ensure the franchisee to perform the franchise contract, the franchisor may require the franchisee to pay a certain deposit and return it to the franchisee after the expiration of the contract, provided that the franchisee has not breached the contract and there is no unknown amount.

Second, the distribution of advertising and promotion expenses:

There are some expenses between the franchise headquarters and franchisees that need to be shared by both parties. The most common expenses are used for advertising and promotion.

1, national advertising promotion expenses.

The advertising and promotion expenses that are fully released in the whole country or a certain region shall be planned by the headquarters as a whole and promoted as a whole, and the expenses incurred shall be shared by the stores. If the advertising promotion is aimed at the franchisor's products, the franchisor does not have to share the expenses.

2. Regional advertising.

If it is a regional advertising activity, when you join in the development in the region, you can write this part of the cost as the agreed content in the contract and collect it on time, so that the regional advertising cost can be shared by the region. Many franchise headquarters give franchisees the right of regional authorization, that is, franchisees can develop other franchisees in a certain region, and the advertising and promotion expenses in this region are only shared among franchisees in this region.

3. The alliance promotes independently.

If the promotion is aimed at franchisees, the expenses must be borne by franchisees. However, before franchisees independently promote sales, they can show their publicity intentions to the headquarters to see if they can get publicity support. It would be better if the franchisee headquarters also intends to do advertising promotion activities.