What are the Key Subjects in the Franchise Agreement

 
KEY SUBJECTS IN THE FRANCHISE AGREEMENT

WHAT ARE THE KEY SUBJECTS IN THE FRANCHISE AGREEMENT? 

USE OF TRADEMARKS 

One of the main benefits you receive when purchasing a franchise is the use of well-known trademarks. This section lists the trademarks, service marks or logos the franchisee is entitled to use. • Has the trademark been in operation for a significant amount of time and is it well known? • Are there any restrictions on its use by the franchisor or franchisee? 

LOCATION OF THE FRANCHISE  

This section describes the exclusive area or territory granted to the franchisee. • Do you have exclusive rights in a certain territory? 

TERM OF THE FRANCHISE  

In this section, the duration of the agreement is specified. • How long does the agreement last? • Can the franchisor purchase the franchise before the agreement expires? • Do you have the right to renew the agreement? 

FRANCHISEE’S FEES AND OTHER PAYMENTS  

In this section, all the mandatory fees are described: • initial fee and what the franchisee receives for that fee • royalty payment, what it is based on and when it is due 

OBLIGATIONS AND DUTIES OF THE FRANCHISOR  

This section describes the franchisee’s responsibilities: • requirements for training • requirements for participation in the business • requirements for keeping and submitting adequate records 

RESTRICTION ON GOODS AND SERVICES OFFERED  

This section describes any restrictions placed on the goods or services offered, including: • required quality standards • approved suppliers • approved advertising • hours of operation • pricing 

RENEWAL, TERMINATION AND TRANSFER OF FRANCHISE AGREEMENT  

This section includes: • the rights and obligations of a franchisee upon termination • descriptions about the transfer of the franchise agreement • descriptions about the renewal of the franchise agreement 

NEXT STEPS 

The International Franchise Association has over 1,400 franchisor members, representing 100 unique business categories, listed on our site.  If you are considering whether or not to go into business for yourself, but not by yourself, we are confident that you will find a number of franchise systems that might be a good fit for you.  To begin your search, visit our franchise opportunties section - click here 

For more information on the franchising business model, click here  

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