Advertising levy
The advertising levy covers the franchise system’s advertising and promotional activities.
Agreement
The franchise agreement is a legal written document that governs the relationship between the franchisor and franchisee. It specifies the terms of the franchise contract such as rights and responsibilities of the parties, fees and payments, territory and duration of agreement.
Approved Site
The approved site is the location that the franchisor chooses, for the franchisee’s set-up, which meets the criteria of the franchise unit.
Area Franchisee
An area franchisee purchases the right to open and operate a specified number of franchise locations, in a defined geographical area, during a defined period.
Business Plan
A business plan is a document prepared by a franchisee, which summarises its operational and financial goals and objectives for the franchise, and contains detailed plans and budgets showing how these objectives are to be achieved.
Capital
Capital is the wealth required by a franchisee. Human capital consists of the franchisees experience, leadership, and knowledge he/she will bring to the franchise.
Collateral
Collateral is a form of security that the borrower may offer the lender to guarantee a loan or other credit. Collateral can be resources, belongings, or something of wealth and value to the borrower.
Copyright
Copyright is the exclusive right of a person to use, and to license others to use, works of art, music, or literature, and to protect these works from the unauthorised use. This statutory right prevents others from copying or exploiting a person’s work without permission.
Earnings Claims
Earning claims are the actual or forecasted franchise sales, profits, or earnings stated by the franchisors.
Equity
Equity is the total value or worth of an asset. It is an individual’s or company’s shares and ownership rights of an asset, and does not represent an obligation to pay in the future.
Feasibility Study
A company that is thinking about becoming a franchisor carries out a feasibility study.
Franchise
A franchise is an agreement in which a firm (franchisor) enters into a contract with other businesses (franchisees) granting them the authorisation to operate in the distribution of goods and services, under the franchisor's trade name and guidance, in exchange for a fee.
Franchise Consultant
A franchise consultant is a business guide with expertise in the franchising industry. They give advice on topics such as franchising operations, companies, and relationships.
Franchise System
A franchise system refers to the different franchises operating in Ireland.
Franchise Unit
A franchise unit refers to each individual outlet, whether company owned or franchised.
Franchisor
A franchisor is an individual, partnership, or corporation who grants an investor (the franchisee), the right to conduct business under their trade name, using their operational methods and organisational systems.
Franchisee
A franchisee is an individual, partnership, or corporation who purchases the right from the franchisor to conduct business under their trade name.
Initial Investment
The total investment is the capital required to start the franchised business.
Initial Franchise Fee
The initial fee is a once off lump sum, paid by the franchisee to the franchisor, upon signing the franchise agreement.
International Franchise Association (IFA)
The International Franchise Association (IFA) is a non-profit trade association of franchisors, franchisees, and suppliers. Founded in 1960, the IFA’s office is based in Washington, D.C.
Irish Franchise Association
The Irish Franchise Association (IFA) is the voluntary self-regulatory body for the Irish franchise sector, with a standards based approach to membership. Its aim is to promote ethical franchising practice in Ireland and help the industry develop credibility, influence and favourable circumstance for growth. As a result one of the IFA's main jobs is to help potential franchisees recognise the good, the bad, and the ugly for what they are.
Licensing
Licensing is the legal act of one party granting rights to another party to a legally protected property in exchange for a fee or royalty.
Master Franchisee
A Master franchisee is the individual who negotiates the franchise rights for a defined territory (usually a country), and assumes the rights and obligations of the franchisor in that particular territory.
Marketing
Marketing is the process or technique of planning, pricing, promoting, selling and distributing products and services to create exchanges that satisfy both the customer and the organisation.
Multi-unit franchisee
A multi-unit franchisee is one that owns and operates more than one unit of the franchise, but does not have the rights to a defined territory.
Operations Manual
The manual contains instructions advising a franchisee how to operate the franchise.
Pro Forma
The Pro Forma document is a description of financial statements which rely on historical data to assume levels of revenue, expenditure, assets, liabilities, and net worth.
Royalty Fee
Also referred to as the “management service fee”, these fees are the continuous payments the franchisee gives the franchisor to stay part of the franchise system.
Supplier
A supplier is the authorised individual or company who has been approved by the franchisor, to supply products or services to the franchisee.
Territory
Territory is defined as a specific area in which the franchisee has the exclusive right to conduct business, without the threat of competition from fellow franchisees.
Trademark
A franchise trademark is a form of identification such as a brand name or logo, which is associated with the franchise.
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