Question
Franchisor Albert owns the trade name and business model-related IP for a fast food business. Franchisee Burt enters into an agreement giving it exclusive rights
Franchisor Albert owns the trade name and business model-related IP for a fast food business. Franchisee Burt enters into an agreement giving it exclusive rights to operate the franchise business in a specified location for 5 years, renewable at Burt's option. Franchisee Burt pays an initial franchise fee, continuing royalties of 5% of revenues, and fees for advertising and other services. Franchisee Burt is entitled to all residual profits after paying these fees. Under the terms of the agreement: Franchisor Albert sets the selling price for core products, determines branding requirements and determines a list of approved suppliers for key food supplies and negotiates the related prices Franchisee Burt is responsible for all other aspects of the operation including: financing the franchise fit-out (subject to Albert's approval of the design for brand compliance), equipment purchasing and negotiating the lease for premises hiring management and employees and negotiating wages and other employment terms determining detailed operating procedures local advertising and promotion renewing the franchise. Who controls the business? Explain your answer
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