Earnout A financing, a guarantee and also an extra income

Most franchisors and franchisees do not know what an earnout is, although it is a very useful tool. It may give the buyer the financing assistance while also serves as a guarantee of income. On the other hand, it also means the seller may earn extra income from the sale through the earnout. There are three common types of earnout: Base Period, Incremental and Cumulative. Negotiating an earnout is a difficult task, it depends on the objective of the parties and the flexibilities of them ...



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