franchise - bona fide wholesale price

Defined in the Federal Trade Commission’s Franchise Rule and one of three terms employed in defining a “business format franchise.” Refers to the price of goods or services for use by or to be made available for resale by the franchisee, the price of which is established in good faith without fraud or deceit. The FTC Rule provides that payments for the purchase of reasonable amounts of inventory at bona fide wholesale prices for resale or lease are not “required payments” and therefore are not considered the payment of a “franchise fee.” Also see “Franchise.”

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