Question: I am looking seriously at buying a franchise. I have received a copy of the franchise agreement and it seems to lean favourably for the franchisor. Is this typical, am I being too cautious? Any help with this would be fantastic. - N Ireland
Answer: Franchise agreements are the most one-sided commercial agreements that you are ever likely to enter into. The reason for this is that they are prepared by franchisor’s lawyers for the protection of franchisors but, more importantly, the whole point about franchising is that franchisees do not go off and do their own thing and so the agreement seeks to ensure that franchisees do perform exactly how the franchisor would want them to perform. Further, from a franchisor’s point of view if someone is trading using their brand it is vital for them that that person does not do anything that could have a detrimental effect on the brand. It is for that reason that the agreement is so favourable for the franchisor.
Have you considered obtaining advice from a franchise lawyer? They can let you have a written report on your proposed franchise agreement, pointing out to you which provisions are unusual, unfair or unworkable.
danakeith on July 14th, 2008 at 10:49 pm
franchising is not good for you if you want to make one step ahead of other competitors, coz franchise businesses have this certain (products and etc.) on their own.