|
Matters to be addressed in the franchise agreement
The Franchise Agreement sets out the contractual position between the Franchisor and the Franchisee.
Matters to be addressed in an agreement may include
the following:
- Grant, what exactly is the Franchisor allowing the franchisee to do.
- Term, what is the length of the franchise, are there renewals of the term.
- What are the obligations of the Franchisor to the Franchisee?
- What are the obligations of the Franchisee to the Franchisor?
- Territory, where can the franchisee operate, geographically?
- Exclusivity, is the franchise agreement exclusive or non-exclusive.
- Payments - Royalty / Advertising levy, what payments are required and when are they to be paid to the Franchisor.
- Minimum performance standards, does the Franchisor require the franchisee to perform to a given budget.
- Training, what does the Franchisor provide, where and at whose cost.
- Operations Manual, the franchise agreement usually requires the franchisee to adhere to the Operations Manual.
- Transfer / assignment, how is this done, what restrictions are imposed.
- Non-Competition / Restraint of Trade, what provisions apply, are they enforceable.
A "franchisable" business is one in which the replication of relatively small units makes sense.
The franchise business must be something which can be learned by a person of average skill and intelligence in a relatively short time.
|
