Franchisee FAQ

Franchisee FAQ

Write By: Green Duniya News Published In: Franchise Created Date: 2017-09-13 Hits: 205 Comment: 0

These are the Question and Answers related to "GREENDUNIYA FRANCHISE SYSTEM".    

Issues Pertaining to Franchisee Fee:

1.     What does the initial franchise fee purchase?

a.      Greenduniya  Super  - Full Franchisee – 100% ownership to Franchisee

                                          i.    Initial Investment  - Rs 6,00,000/-

                                         ii.    ·         Royalty Fee   - 1% on Material purchase

                                        iii.    Renewal Fee  - Rs 20,000/-

b.    Greenduniya Mini – Semi Franchisee  - % ownership to Franchisee

                                          i.    Initial Investment  - Rs 3,00,000/-

                                         ii.    ·         Royalty Fee   - No Fee

                                        iii.    Renewal Fee  - Rs 10,000/-   

c.     Greenduniya Micro –

                                          i.    Initial Investment – Rs 50,000 /-

                                         ii.    Royalty Fee – No Fee

                                        iii.    Renewal Fee – Rs 5,000 /-

2.     Does it include software for maintaining inventory of products and supplies?

a.     Greenduniya  Super  – Yes

b.     For Greenduniya Mini/Micro – No

3.     What are the payment terms: amount, time of payment, lump sum or installment, financing arrangements, etc.?

a.     50% on Advance on Agreement Day – Remaining 50% within 15 days else. Agreement deemed to be automatically cancelled and payed amount is not refundable.

b.    Check/DD/Online – in favour of “Greenduniya Technology Services Pvt. Ltd”

Account Name:  GREENDUNIYA TECHNOLOGY SERVICES PVT LTD.

Account Type: Current Account

Account Number: 00000035702736249

Account Description: CA-GEN-PUB OTH-NONRURAL-INR

Branch: MADDILAPALEM

IFS Code: SBIN0011656

4.     Does the franchisor offer any financing, or offer help in finding financing?

a.      No.

5.     Are there any deferred balances? If so, who finances and at what interest?

a.     18% Interest

6.     Is any part or all of the initial fee refundable?

a.     Once Agreement Signed , No

7.     Does the contract clearly distinguish between “total cost” and “initial fee,” “initial cash required,” or “initial costs,” etc.?

a.     Yes

8.     Are there periodic royalties? If so, how much are they and how are they determined?

a.     No periodic royalties.  Only 1% royalty fee on material purchase or services provided from franchisor.

9.     If royalty payments are in whole or part payment for services by the franchisor, what services will be provided?

a.     All services are listed in Website Greenduniya.com

10.  Are accounting/book keeping services included or available?

a.     For Greenduniya Super  -  Yes – (Software & Ext. Hardware for billing and  inventory sync)

b.    For Greenduniya Micro/Mini – No  (Franchisee can opt for Software  & Ext. Hardware for billing and inventory and will be available on payment Rs 65000 )

11.  How are advertising and promotion costs divided?

a.     Advertisement of  Franchisee shop will be done online and Global media by Franchisor

b.    Local advertisement of shop should be done by Franchisee only

12.  Is a specified amount of working capital required of the franchisee to cover operating costs until profits can be made?

a.     Yes, recommended to have working capital for at least 6 months shop expenses apart from material purchase.

13.  Must premises be purchased or rented, and are there further conditions on either of these (from franchisor, selected site, etc.)?

a.     For Greenduniya Super/Micro/Mini  –  It is Franchisee has to find a good place for  rent or purchase  and should be approved by Franchisor

14.  How and by whom will the building be financed, if purchased?

a.     On  Franchisee name only

15.  Does the franchisee have to make a down payment for construction and/or equipment?

a.     No

Issues Pertaining to the Franchise Location Terms:

16.  Does the franchise apply to a specific geographical area? If so, are the boundaries clearly defined?

Yes,  Based on Zip codes

a.     For Greenduniya Store – 6 zip codes

b.    For Greenduniya Micro – 1 zip code

c.     For Greenduniya Mini – 2 zip codes

17.  Who has the right to select the site?

a.      Franchisee

18.  Will other franchisees be permitted to compete in the same area,  now or later?

a.     No

19.  Is the territory an exclusive one, and is it permanent or subject to reduction or modification under certain conditions?

a.     Yes, based on  request by Franchisee  and availability

20.  Does the franchisee have a first refusal option as to any additional franchises in the original territory if it is not exclusive?

a.     Yes , You can put your valid  concern if any.

21.  Does the franchisee have a contractual right to the franchisor’s latest products or innovations? If so, at what cost? 

a.     Yes and based on product and with additional amendment in agreement if required.

22.  Will the franchisee have the right to use his own property and/or buildings? If not, will the franchisor sell or lease his property to the franchisee?

a.     Yes

Issues Pertaining to the Buildings, Equipment and Supplies Terms:

23.  Are plans and specifications of the building determined by the franchisor?

a.     For Greenduniya  Super  - Yes,  Recommended  Minimum space -  1000 Sq.ft

b.    For Greenduniya Micro/Mini  -  Yes,  Recommended  Minimum space - 300 Sq.ft

24.  Must equipment or supplies be purchased from the franchisor or approved supplier, or is the franchisee free to make his own purchases?

a.     For Greenduniya  Super   - Franchisor will supply  required Software/Hardware Franchisor  running the business -  Franchisee has to have 1 computer of required configuration.  Product supplies must be purchased from Franchiser only . 

b.    For Greenduniya  Micro/Mini   - Franchise can opt for  required Software/Hardware Franchisor will supply for running the business -  Franchisee has to have 1 computer of required configuration. Product supplies must be purchased from Franchiser only. 

25.  When the franchisee must buy from the franchisor,   are sales considered on consignment?  Or will they be financed and, if so, under what terms?

a.     Must buy from Franchisor only. 

26.  Does the agreement provide for continuing supply and payment of inventory (by whom, under what terms, etc.)?

a.     Yes , as per agreement shared with Franchisee.

27.  Does the franchise agreement bind the franchisee to a minimum purchase quota?

Yes – Initial minimum purchase  -

                                          i.    ·         For Greenduniya Super -   Rs 6,00,000

                                         ii.    ·         For Greenduniya Mini    -  Rs  3,00,000

                                        iii.    ·         For Greenduniya Micro -    Rs 50,000

28.  What controls are spelled out concerning facility appearance, equipment, fixture and furnishings, and maintenance or replacement of the same? Is there any limitation on expenditures involved in any of these?

a.     Yes – As per Agreement shared with Franchisee 

29.  Does the franchisor have a group insurance plan? If not, what coverage will be required, at what limits and costs? Does the franchisor require that it be named as an insured party in the franchisee liability coverage?

a.     No,  Franchisee has to do his shop  individual insurance. 

Issues Pertaining to the Operating Practices Terms:

30.  Must the franchisee participate personally in conducting the business for any events? If so, to what extent and under what specific conditions?

                                          i.    Yes he can participate in local or global events for promoting company brand and products and services with this own cost or some times on shared basis depends up on the event or program

31.  What degree of control does the franchisor have over franchise operations, particularly in maintaining franchise identity and product quality?

a.     Yes – As per Agreement shared with Franchisee. Any infringement identified in product quality or doing any external purchase of products or sales in the shop or customer dissatisfaction on the behavior of the owner or staff or damaging company tangible and  non-tangible assets effecting  Greenduniya brand an   appropriate legal action will be  taken on immediate action and will have severe  penalties mounted on Franchisee.   

32.  What continuing management aid, training and assistance will be provided by the franchisor, and are these covered by the service or royalty fee?

a.     Yes -  Remote online training will be provided and support over the time and it is included in royalty fee.

33.  Will advertising be local or national and what will be the cost-sharing arrangement, if any, in either case?

a.     For local , Franchise has to bare all costs pertaining to your shop

b.    For global branding franchisor will takes care of it.

34.  If local advertising is left to the franchisee, does the franchisor exercise any control over such campaigns or share any costs?

a.     Yes , they can do campaigns with their own cost. Some events can be shared after getting approval from Franchisor

35.  Does the franchisor provide various promotional materials point-of-purchase, mail programs, etc. and at what cost?

a.     Yes – all digital materials shared with free of cost.

36.  What are book keeping, accounting and reporting requirements, and who pays for what?

a.     For Greenduniya Super – Franchisor will provide software for billing/taxation.

b.    For Greenduniya Mini – Optional - Franchisor will provide software for billing/taxation on purchase by Franchisee

c.     For Greenduniya Micro – Franchisor will not provide software for billing / taxation.

37.  Are sales or service quotas established? If so, what are the penalties for not meeting them?

a.     Appropriate action will be taken as per the agreement shared with Franchisee

38.  Are operating hours and days set forth in the franchise contract?

a.     Yes  –  9 AM to 9 PM   7 days/week.

39.  Are there any limits as to what is or can be sold?

a.     No , but Franchisor sets in case for any exclusive items in case in future. 

40.  Does the franchisor arrange for mass purchasing and is it mandatory for the franchisee to be a participant buyer?

a.     Yes

41.  Who establishes hiring procedures initially and through the franchise term?

a.     Franchisee sole responsible for hiring quality people – but has to inform the details of employees to Franchisor immediately. 

Issues Pertaining to Termination and Renewal Terms:

42.  Does the franchisor have absolute privilege of terminating the franchise agreement if certain conditions have not been met, either during the term or at the end?

a.     Yes – As per Agreement shared with Franchisee and in case franchisee breaks the agreement at any case, a formal notification should be sent to franchisor. Upon acknowledgement for the same from the franchisor   following cancellation charges applicable from that date and should be paid within in period of one month.   Appropriate legal action will be taken if not paid as per the terms.

b.    For Greenduniya Store -  Rs 10,00,000/-

c.     For Greenduniya Micro -  Rs 1,00,000/-

d.    For Greenduniya Mini -  Rs 3,00,000/-

43.  Does the franchise agreement spell out the terms under which the franchisor may repurchase the business?

a.     No

44.  Does the franchisor have an option or duty to buy any or all of the franchisee’s equipment, furnishings, inventory, or other assets in the event the franchise is terminated for good cause, by either party?

a.     Yes

45.  If the preceding situation occurs, how are purchase terms determined?

a.     based on business performance and number of customers, assets and aging factors.  

46.  Is there provision for independent appraisal? Is any weight given to good will or franchisee equity in the business?

a.     Yes– for a good  franchisee , royalty fees may be reduced or waived. 

47.  Does the original agreement include a clause that the repurchase price paid by the franchisor should not exceed the original franchise fee? If so, this eliminates any compensation for good will or equity?

a.     No , not at this moment.

48.  Under what conditions (illness, etc.) can the franchisee terminate the franchise? In such cases, do termination obligations differ?

a.     Franchisee has to run the business as per the agreement for the agreement period. However  he can transfer the business  to any one who is interested after approval of Franchisor

49.  Is the franchisee restricted from engaging in a similar business after termination? If so, for how many years?

a.     He cannot do or compete with similar business under him and his family members at least for 20 years from the termination or agreement expiry date.

50.  Does the contract provide sufficient time for amortization of capital payments?

a.     Yes

51.  Has the franchisor, as required, provided for return of trademarks, trade names, and other identification symbols and for the removal of all signs bearing the franchisor’s name and trademarks?

a.     Yes , Franchisee has to return all Franchisor related trademarks or materials etc on termination.

Other Points to Consider:

52.  Can the franchisee sell the franchised business and assign the franchise agreement to the buyer?

a.     Yes – after approval of the Franchisor

53.  Is the franchise assignable to heirs, or may it be sold by the franchisee’s estate on death or disability?

a.     Yes – after approval of the Franchisor

54.  How long has the franchisor conducted business in its industry, and how long has it granted franchises?

a.     2 Years and   1 Year

55.  How many franchises and company-owned outlets are claimed, and can they be verified?

a.     2  - Vizag and Bangalore,  Yes ,you are welcome.

56.  Are all trademarks, trade names, or other marks fully identifiable and distinct, and are they clear of any possible interference or cancellation owing to any pending litigation?

a.     Yes, Trademarked and Clear

57.  What is the duration of any patent or copyright material to the franchise? If time is limited, does the franchisor intend to renew, and is this spelled out in the franchise?

a.     Yes, It will be renewed as it when required

58.  Has the franchisor provided the franchisee with an offering  document package meeting rule requirements or standard format?

a.     Yes - Required material will be provided for running the Franchisee.

59.  Has the franchisor met all state law requirements (registration, escrow or bonding requirements, etc.), if applicable?

a.     Yes

60.  Are there state laws governing franchisor/franchisee relationships, including contract provisions, financing arrangements and terminations? If so, does the contract meet all requirements?

a.     Yes

 

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