Free Tips on Franchise Agreement
Franchise agreements are consider important if you are planning to buy a franchise business. This will clearly be a step by step guide on how everything would work in then franchise system.
It gives both the franchisee and the parent company to have a clearer understanding of the whole terms and condition of the whole business dealings.
The franchise agreement often serves as a way to ensure uniformity which is actually beneficial especially to the franchisee. For example a customer is not satisfied with your service; you are responsible in maintaining uniformity. This can help in establishing the parameters of the standards of the whole operation. There are certain parameters that are included including what products to use or sell. This also set the guidelines on how the quality of service is provided for by the people in the company. The agreement should also include details like actions that will be taken just in case there is a breach in parameters.
You might wonder what are the things included in the franchise agreement. The first thing about this agreement is the fact that it should state that you are a part of the franchise. There is also a need to define a certain amount for the franchise fee. The mother company has the right to approve the location of the store. However they are obliged to help you to seek for the perfect store for your business. There is a section in the franchise agreement that deals with the franchise name. Specifically, you are not allowed to use the name of the franchisor and you will be asked to inform them if somebody else is using it without permission. This would also include the expectation in maintaining the uniformity that was mentioned above.
There are other provisions that might be included in franchise agreement. This includes how you would display the signage in your location. There are certain restrictions when it comes to the signage of the franchise name. Often there is a section that would include training and assistance. The parent company is responsible of passing information to the franchisee. There is also a section that specifies advertisement of the company. The advertising materials are usually for approval of the parent company that would ensure uniformity. There is also a section about the operating manual that request the franchisee to abide by it. This is the property of the franchisor so it is under strict confidentiality.
It is best if the franchisee would operate in a clean and well maintained environment. The franchise agreement would also need to contain record and accounting. It should be certified by a professional accountant. There is also a definition of standards and quality which can be long enough to ensure a good franchise system. The franchise agreement would also define the time period of the whole contract. Finally a franchise agreement contains that the success is not always guaranteed by the franchisor.
It is best that before you sign any document; make sure to read it well. Hire a lawyer to go over the whole document so you will not have trouble in the future.
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