In a typical franchise agreement, the franchisor pays the franchisee a fee to manage its company, and the two of them split the profits based on the percentages established in the agreement.

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The franchisor, who owns the rights to the company's name and products, usually does not pay the franchisee. More typically, the franchisee pays the franchisor a royalty to use the company's name and sell its products or services in a given area.

In a Typical Franchise Agreement, the Franchisor Pays the Franchisee