IDEAS home Printed from https://ideas.repec.org/a/alq/rufejo/rfej_2023_09_38-46.html
   My bibliography  Save this article

Franchise Agreement: Payment Terms and Method of Calculating Franchisor’s Income and Expenditure

Author

Listed:
  • Anatoly Sergeevich ISHUK

    (Russian Foreign Trade Academy, Moscow, Russia)

  • Yuri Anatolievich SAVINOV

    (Russian Foreign Trade Academy, Moscow, Russia)

Abstract

The diversity of fees is a peculiarity of financial flows in franchising. In addition to regular payments in the form of royalty, the franchisee shall also pay a lump sum upon conclusion of the agreement and make all the other negotiated payments. However, in spite of the diversity of franchise payments, there is no unified classification and method of their calculation in Russian literature. As a result, would-be franchisees often give up buying a franchise in order to avoid all the complexities of financial relations with the franchisor. However, franchisors often calculate payments in accordance with subjective realities and do not consider market conditions. The article focuses on financial flows in franchising and offers a method of calculating franchise fees. The article proves that the diversity of franchise fees emanates from economic essence of franchising and that objective market laws should serve as a necessary fundament for franchise fees’ calculation. The study analyzes the factors of generation and distribution of franchise financial flows, and its results can be applied to business practices of franchising enterprises.

Suggested Citation

  • Anatoly Sergeevich ISHUK & Yuri Anatolievich SAVINOV, 2023. "Franchise Agreement: Payment Terms and Method of Calculating Franchisor’s Income and Expenditure," Russian Foreign Economic Journal, Russian Foreign Trade Academy Ministry of economic development of the Russian Federation, issue 9, pages 38-46, September.
    • Handle: RePEc:alq:rufejo:rfej_2023_09_38-46
    DOI: 10.24412/2072-8042-2023-9-38-46
    as

    Download full text from publisher

    File URL: http://repec.vavt.ru/RePEc/alq/rufejo/rfej_2023_09_38-46.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.24412/2072-8042-2023-9-38-46?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:alq:rufejo:rfej_2023_09_38-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna Chernyavskaya (email available below). General contact details of provider: https://edirc.repec.org/data/vavtmru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.