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

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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.�

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