America's #1 Franchise Directory, Trusted for Over 15 Years

Franchisees Investigate: Online Sales & Franchise Agreements

With so many new ways to interact with customers throughout just one day of business thanks to technology, franchise systems are certainly jumping on the chance to share their products or services with customers in a variety of settings.  Social media through the Internet and online transaction portals are sales environments growing in popularity that reach out to potential customers.  Franchisees thus have a few things to consider when they start up their franchise concept.

Weigh In On Your FDD & Ask Questions

The Franchise Disclosure Document (FDD) is the key to completely understanding how your prospective franchise system operates, how franchisees are compensated, and from this document any questions can be raised and answered before agreements are finalized.  To enhance your satisfaction and promote a wise investment decision, be sure to hone in on any areas that may be unclear to you or that may be less than satisfactory based on your expectations.  Pursue professional guidance in this matter.

The FDD is where franchisees can find out more about how the franchisor views their rights in terms of sales compensation.  For example, clients can now easily shop online after visiting a franchise location and speaking in person with representatives in the store.  In-store interactions with staff could very well be linked to or entirely responsible for the client’s decision to move forward and buy any given product or service.  Would this purchase and purchases like it be compensated to the franchisee?  How are revenues distributed based on where the sale occurs?  These are important topics to discuss with potential franchisors in great detail because franchisees often gain revenue rights within an exclusive territory and the FDD may not list the online realm as a part of that territory.

Understand Website and Mobile Application Transaction Revenues

Whether it’s web sales, as previously mentioned, or sales through mobile devices or other means, with each passing year seemingly altering how customers can shop with technology, franchisees do well to consider how promoting their franchise system’s social media sites or mobile based applications figures into overall revenue projections.  Namely, will marketing efforts detailed by the franchisor focus on certain “territories”, such as social media sites for example, that primarily procure revenues for the franchisor, even when customers interacted with franchisees in person prior to the transaction?

There are a number of detailed questions and scenarios that can arise out of how revenues are divided between franchisee and franchisor in situations where customers are buying a product or service in an out-of-store setting, such as frequently occurs online.  Whether or not incentives are geared to motivate franchisees in any given franchise system is something to consider, as well as how satisfied current franchisees are with the way the franchisor handles such scenarios.  Franchisees who consider these matters in advance, to determine if the franchise system’s approach is compatible with franchisee aims, are far more likely to be satisfied into the future.  Inquiring further also gives the franchisor an opportunity to explain the contents of their FDD, and offer details regarding compensation and territory policies concerning the realm of technology, which can clarify the subject for both parties in some cases.

comments powered by Disqus

Your Request List

You can add items by clicking the "Add to Request List" button or checkbox when you find something you're interested in.

You may add up to 15 items to your Request List

Your request list will follow you around the site.

When you are ready to complete your request for free information, click "Submit" in your Request List.

Why not get started by browsing our New Franchise Opportunities or Low Cost Franchise Directory?

You may only enter 15 items in your Request List.

To request information from your selected companies, just fill in the form and click "Submit".

OK, got it

Request Info From:


Your List is Empty

You can add items by checking the "Request FREE Info" boxes.

* indicates required field

Optional Information

Join our mailing list!

We share your information only with your selected franchises.