Poor Franchising Can Cost Millions

4hoteliers:

Millions of pounds of income could be lost by hospitality and leisure companies, due to the failure to adequately monitor franchising agreements –

Ninety per cent of companies examined by PricewaterhouseCoopers from all sectors have misreported royalties or licence fees associated with franchise and licence agreements, a mistake that can easily go undetected.

Melanie Butler, partner in Licensing Management Services, at PricewaterhouseCoopers LLP said the majority of cases of under-reporting by companies involved human error and misinterpretation of accounting, clerical and contractual aspects of the agreement rather than deliberate understatement:

“Under-reporting of royalties and licence fees agreed in a contract can be costly. This is often the result of misunderstanding the agreement.


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