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Franchise fee definition

Question
What is a franchise fee? 
Answer
A franchise fee is the upfront cost of entry when purchasing a franchise business. This fee is primarily paid to the franchisor and is used by the franchisor to fund the initial support required by new franchisees.

This support includes infrastructure upgrades such as technology, the hiring of additional employees, and other operational support items to keep up with the amount of new franchisees entering the system. 
Brain Trust contributor: President-Life Changer of Franchise Selection Specialists Inc.
Related Categories: Cash Managment, Franchising
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