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I intend franchising my business. Can I ask for a franchise fee and is it permissible to collect

Answered according to Hanafi Fiqh by Darulihsan.com

Ref: tij005/08

February 2008 

Q: I intend franchising my business. Can I ask for a franchise fee and is it permissible to collect royalty on turnover.

A:

According to our research leasing out of registered intellectual property is permissible. Hence, you may charge a fee for leasing out your franchise name. Charging royalty on turnover is acceptable provided it is capped by a fixed figure.

 

Mufti Shafiq Jakhura
Iftaa Department, Darul Ihsan Islamic Services Centre
 
I concur with the answer:
Mufti Zubair Bayat

Ameer, Darul Ihsan Islamic Services Centre

 

 

 

 

This answer was collected from DarulIhsan.com. It’s the official website of Darul Ihsan, which is an Islamic organisation (PBO) based in Durban, South Africa.

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