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some important franchise terms that you'll need to know
as we go along in this process and as you progress
both through this video series and
in the franchise purchasing process will involve
some basic items
the first term you'll need to know is
what is or who is the franchisor
the franchisor is the company that your hopefully considering or may
purchase a franchise with
the franchisor has established a business
a business model and business locations
and will be offering to you the right to purchase a franchise
this brings us to the next term which is franchisee and if you're looking to buy
a franchise
well then you're a prospective franchisee as a franchisee you'll be
entering into a relationship with the franchisor
you'll be signing a franchise agreement and if everything goes well you'll be
establishing your own
franchised location another important term relates to a protected territory
or operating territory your operating territory is gonna be the territory that
the franchisor grants to you
the territory that you'll be authorized to
establish your franchise location in why is this important because one of the
most important
rights that you need to negotiate and be aware of in your franchise agreement is
what territory your granted
where the franchisor could sell additional units
or locations and the territory where the franchisor may or may not agree
to not allow competition another basic term you need to be aware of
is the franchise fee and the franchise fee is the fee you're going to pay
when you sign a franchise agreement and you pay that fee to the franchisor
and that gives you the grant or the right to become a participant in the
franchise system
one last basic term relates to royalties
as a franchisee you will have an obligation
a continuing obligation whether its weekly or monthly
to pay the franchisor a royalty fee and it's just what it is
it's an ongoing fee you'll pay the franchisor for the right to
participate and be part of the franchise system
those are just some basic terms its important to get them out there now
and of course there's many more that we'll discuss during the video series