Frequently Asked Questions

Questions about franchising and the law

In this section, experts answer the questions most commonly asked about the legal requirements and stumbling blocks for franchisors and franchisees.

Why do franchisors insist on the payment of an entry fee?

This purchase fee is primarily a prepayment to the franchisor for the building up of the market, the level of recognition and system development. » Read more

Why do franchisees have to pay ongoing franchise fees?

Typically the regular fees cover the services rendered by the central system to the franchisee after he/she has commenced business, notably in this context assistance with financing, management assistance and training facilities by the central system. » Read more

What subjects are regulated by franchise manuals?

The system manual describes in detail how the franchise concept is to be realised. It includes instructions to facilitate the franchisee’s work as a manager. » Read more

Are franchisees given protected rights to an exclusive territory or an exclusive group of customers?

Above all, franchisees may not be forbidden to carry out passive marketing, which also includes for example e-commerce via the Internet. » Read more

What exactly is ‘specific know-how’ as far as franchising is concerned?

"Know-how" means a package of non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified. » Read more

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