If you’re thinking about buying a franchise, here are 12 provisions you should NOT agree to, according to the American Franchisee Association:
* Gag rules: A franchisee may not discuss any aspect of their franchise experience with anyone outside the system.
* Litigation venue: Franchise disputes must be litigated in the home state of the franchisor.
* No reciprocal cure period: Franchisor gets up to 90 days to correct any alleged defaults while franchisee gets no time to fix wrongs.
* Non-competition covenants: There are time and geographic restrictions if a franchisee leaves the system to open a competing business, but the franchisor is allowed to place competing units anywhere, anytime.
* Sole sourcing requirements: Franchisees must purchase products solely from the franchisor or from suppliers designated by the franchisor, with no allowance for alternative sources.
* Kickbacks: The franchisor may accept commissions for giving exclusive deals to vendors and requiring the franchisee to use those vendors.
The Dirty Dozen?
July 19, 2007 by Cris | 0 Comments
In Franchisees, Franchisors, Franchises, Startup, Negatives and/or Positives, Basic Guidelines, Law & Agreements


















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