Question
A person owns a franchise business selling only halaal products. The franchisor demands 12% of turnover every month regardless of how high the other overheads are. When a franchise business is purchased, the franchise agreement is signed. This agreement stipulates the 12% franchise fee; that one will disclose all takings; certain items have to be purchased exclusively from them. Is it permissible to falsify the turnover to show a lower figure so that a lower amount be paid as the fee? Will it be permissible to buy stock from elsewhere despite the agreement?
Answer
The whole agreement from beginning to end is baatil and haraam. The 12% franchise fee is haraam riba. The stock stipulation is haraam and invalid. The franchisor is not entitled to a cent. It is permissible to 'falsify' the figures. In terms of the Shariah it will not be falsification. On the contrary it will be concealing one's assets from a robber. It is permissible to purchase stock elsewhere.
- Source
- themajlis.co.za
- Published in
- The Majlis Vol 18 No 12
- PDF page
- 3
Appears under Questions and Answers (approximate).