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Chapter 6. The Service Delivery System a... > An Overview of Marketing and the Lic...

An Overview of Marketing and the License Agreement

When the franchise relationship becomes litigious, marketing always seems to have some role in the breach, so it makes sense to see how marketing is handled in the license agreement. It should explicitly outline all fees and expenditures mandated by the franchisor. Some franchisors require payments that go beyond the advertising fee for such things as printing collateral material like point-of-sale posters. The market penetration (in number of outlets) that must be achieved to form a regional cooperative also should be detailed in the agreement. Finally, the agreement should clearly outline the governance of the national advertising mechanisms. As previously mentioned, a large amount of your dollars flows through the fund. The proper checks and balances should be in place to ensure the proper allocation of those funds. Please refer to Chapter 10 for a more complete discussion of the franchise license agreement.


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