Franchise agreements explicitly grant franchisees the right to use certain brands, such as logos or slogans, in a particular way. Anything outside of these explicit parameters, or something that is not explicitly mentioned in the agreement, is not permissible. While not all franchisors will repeat the pre-opening and post-opening services they offer to the franchise in franchise publication documents, strong design principles will require that these issues be repeated in the franchise agreement. However, the inclusion in the franchise agreement eliminates the spectre of litigation to introduce rights into the contract that are not otherwise indicated. The franchise agreement should also contain a section explaining what an offence is and the consequences of the offence. It should also indicate the measures taken to remedy a breach of contract or what happens if the contract is terminated. The compensation clause in the franchise agreement should stipulate that the franchisee reimburses the franchisor for any losses resulting from negligence or misconduct. « You want the franchise to be the same and feel the same, whether you`re in a place in New York, Iowa or Europe, » Goldman said. As the name suggests, franchisors will meet the franchisee`s specific quality control requirements.
This is a strong and necessary franchise to ensure that goods and services throughout the system meet the minimum requirements of the franchisor. This section should make public all training offered by the franchisor, including training, seminars, meetings or other, that the franchisor will request or ask the franchisee to participate. All franchise agreements require the franchisee to have insurance to cover its activities. In all cases, each franchisee`s insurance policy requires the franchisor to be designated as « additional insured, » meaning that the franchisor has the same coverage as the franchisee, although the franchisor does not pay for the coverage. Franchise agreements are almost always presented to future franchisees as « non-negotiable » for good reason. All franchise agreements contain some recitation of franchise breaches, which are treated as an offence. These offences can be subdivided into offences resulting in the immediate termination of the franchise agreement for which no cure is granted and in the event of an offence for which healing is foreseen. « Unless you`re the first or second person who`s never been a particular franchise company, the fees are pretty stone-etched, » Goldman said. The following excerpt is from The Franchise of Rick Grossman Bible. Buy it now on Amazon| Barnes and Noble | iTunes | IndieBoundThe franchise agreement is the contract between you and the franchisor, but it is not a « standard » or « form » agreement. The format of the contract differs from one franchise system to another. This section of the franchise agreement should also specify who pays for insurance coverage.
The franchise agreement is essentially a legal document between the franchisor and you (the franchisee). This is a legally binding agreement. It explains in detail what the franchisor expects of you as a franchisee, in the way you operate every facet of the business.