Question
I have a franchise outlet for which I pay the franchisor 12% royalty on my turnover. I have been told that franchise fees are haraam. May I pay the haraam fees with interest money which I am receiving on my savings in the bank?
Answer
Franchise fees are extortion and haraam. Such fees are in the category of riba. It is not permissible to enter into this type of haraam agreement. Since you are trapped in it, you may pay the 12% haraam royalty with the haraam interest. When the agreement expires, you should not renew it.
- Source
- themajlis.co.za
- Published in
- The Majlis Vol 18 No 12
- PDF page
- 12
Appears under Questions and Answers (approximate).