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What information is included in the franchise agreement?
There are common themes that run through most franchise agreements, including: The right for a franchisee to operate the franchised business in its ‘territory’ and to use any trade marks or other relevant intellectual property rights that the franchisor owns in the operation of the business. The right to operate the franchised business for a certain period of time. The agreement may also state that it is renewable, provided that certain conditions are met. The obligations of both parties. It is important that the franchisee ensures that there is an obligation placed on the franchisor to provide necessary initial and continuing training, as well as other ongoing support and the continued development and/or improvement of the franchise concept. Operating restrictions and obligations on the franchisee to ensure that the franchisor is able to maintain a uniform service and quality across the network and to protect its brand. Details of any initial fee and any other continuing fees that a franchisor may charge. Details of what happens if the franchisee wants to sell the business, or if the franchisee dies or is incapacitated. Details of how and when the franchise agreement may be terminated. Consequences of termination - the most important for a franchisor is to restrict the franchisee from being able to set up a similar business within the ‘territory’ for a certain period of time after termination.
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