franchise - fractional franchise

A relationship that is exempted from the FTC Rule because the franchisee or its principals have had more than two years of prior experience in the franchised or similar business; and wherein the franchisor or the franchisee anticipates that the franchisee’s sales arising from the franchise would represent no more than 20% of projected volume in the first year of the relationship. Some state franchise laws also have a fractional franchise exemption.

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