As a wholesale distributor, how much should I offer a franchisor on the front end to service its franchisees?

min read
Opinions expressed by Entrepreneur contributors are their own.

The franchise industry is all over the board when it comes to accepting payments from vendors and suppliers.�Many franchise companies do not accept any such payments (instead negotiating for lower prices for their franchisees). Others accept them but require the payments to be made into the franchisees' advertising fund. Still others accept these payments and put them into the corporate coffers.�

Whatever approach is used, if any payments or rebates are accepted, then that fact must be disclosed in the franchisor's FTC mandated disclosure documents so it is a matter of public record.

Here's my suggestion for you.�Simply ask the franchise company what is standard in its operation--there are no secrets in this type of matter, so the franchisor should be willing to tell you straight up. Then factor it into�the pricing of your bid.�

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Are you paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.

Latest on Entrepreneur