THE FRANCHISE MODEL
3.1 Individual Franchise Model
Music Lessons Academy has adopted an individual franchise model meaning each franchise partner has a direct relationship with the franchisor.
The Individual Franchise Model can be represented like this:
3.2 The Franchise Agreement
The Franchise Agreement is a signed legal contract, which is the basis of your business. It provides the rules for a long and mutually rewarding co-operation between the franchisor and the franchise partner and establishes the obligations of both parties to maintain a continuing business relationship.
The Music Lessons Academy franchise agreement is a 4-year term with a 4-year option to renew.
Be aware of the terms and conditions, which are included as a protection for both parties. Failure to comply with the terms of the Agreement could lead to termination, particularly in relation to the following:
- Failure to pay outstanding invoices and fees.
- Failure to actively carry on the business.
- Selling unauthorised products.
- Violating State or Commonwealth regulations concerning the business.
- Disclosure of trade secrets, improper use of signs and logos or violation of the business practices set out in this manual.
3.3 Franchise Territories
The Music Lessons Academy franchise model provides franchise partners with an unlimited working territory and an exclusive marketing territory. This gives franchise partners the best of both worlds.
They can take clients from any area which enables them to tap into networks and benefit from word-of-mouth referrals while at the same time having peace of mind to build a client base and brand in their local area.
The franchise will trade as Music Lessons Academy (Surname) and will have their own
- GST Registration,
- bank accounts etc,
3.4 Franchise Royalty Payments:
Music Lessons Academy franchise royalty fee is 8% of turnover. The royalty fee is charged monthly.
Franchise partners will be invoiced on the 15th of the month with payment due on the 30th for the month in arrears.
Royalty fees are to be paid into the following bank account.
Account Name: Music Lessons Academy Pty Ltd
BSB Number: 302 162
Account Number: 1799741
The royalty fee will be Increased annually by CPI or 3% whichever is greater on 1 July each year.
3.5 Marketing Fund
Music Lessons Academy will not commence with a Marketing Fund but may introduce it once the franchise network reaches a critical mass.
At that time the marketing fund will be a percentage of turnover, most likely around 3%
3.6 Lead Allocation
Franchise partners can generate their own leads and head office will also generate leads online on a national basis.
Head office leads will be allocated on a rotational and geographic basis.
If the franchise partner receives a lead from head office, they must accept or reject that lead within 24 hours.
If they accept the lead the client must be contacted within that first 24 hours and a trial lesson booked.
If 50% of leads are rejected over a 6-month period, the franchisor will have the right to appoint another franchisee in that territory.