Answer:Franchise is an authority given by an organisation to an entity allowing the entity to carry on same line of business the organisation does
Explanation:Six important questions to ask before signing a franchise agreement.
1)Am I using the same vendor:Franchisor usually have a set of specific vendors they trade with because of the same services they get from them,this services may not be gotten from other vendors.A franchisee should know if he has to continue with such vendors or can independently bring his own sets of vendors before signing a franchise agreement.
2)What are the terms of payment;Of course,there are specific amount of money to be paid.The franchisee should ask about terms of payment,how royalties will be paid,are there payment on sales,advertising .The reply should be stated in full details before signing a franchise agreement.
3)Can I see the financial statement of the Franchisor;It is important the franchisee sees the revenue and expenses of the Franchisor.This will help you to decide if the Franchisor has strong financial hold before signing the agreement.
4)Will I continue on your marketing strategy;The franchisee needs to ascertain if he can start his own marketing strategies or follow through the Franchisor marketing.
5)Am I entitled to any other benefits;Will I get incentives on royal paid?Some Franchisor gives franchisee royalty cap.This gives the franchisee more financial opportunities as sales increases.
6)Will the Franchisor provide staff to work with;Some Franchisor provides staffs for their Franchisee because the staffs have special skills needed for a production process.