hello, i am thinking of becoming a franchise, but the franchisor offered me a sub franchisee contract instead as he has too many franchisee already.
he asured me that it's very similar to a franchisee just that he won't be dealing with me directly.
But when i read the contract the franchisee fee is taken every quarterly, , the first and second term is a set fee, but the third term onwards, they want 20% of the net income.
so from third term they will take 20% of the 1st term, then fourth term will take the net income of the 2 term and there after.
as i am not sure if that is reasonable, i have worked out a few numbers, on average if i earn 1551.30 net, i would need to give 310.26 as franchise fee for that month, which makes my earning for that month 1241.04 net. i only would need to work three days a week, all the other days i do admin dealing with queries, advertise etc.
i would get support, and i don't need to pay for royalty apart from extra training if required and training if required.
the company is pretty new, but have won an award this year. i was going to go for it, but I was speaking to someone and they said it's a bit expensive as it's normally between o-20%.
any advice would be much appreciated.
thank you