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What is a "Franchise Fee"?

The term "franchise fee" refers to the upfront charge/fee paid by a prospective franchisee to a franchisor to obtain the right to become a franchisee and to establish and operate a franchise. Franchise fees are typically one-time charges that are not refundable. The exact amount, refundability and other characteristics of a particular franchise fee is identified and defined in the franchisor's franchise disclosure document.

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