Before Signing A Franchise Agreement

Posted on: September 12th, 2021 by designer No Comments

Franchisors and franchisees have a common interest in protecting the value of franchisees` intellectual property. However, there is also a possibility of conflict if one of the parties does not devote adequate resources to the protection of intellectual property with respect to franchising. Each franchise has specific rules on how franchisees must operate their units. This may include, among other things, operating hours, certain items or services sold, and a salary scale for employees. The management structure, the software used and the way in which a franchised site is to be created are other points that may be covered by the operating rules. Each franchised site covers a specific area defined in the franchise agreement. Other franchises cannot have their locations within a certain number of miles. This is done to ensure that there is not too much competition in the area, which can limit the sales potential and success of the franchised site. The franchisee will want to ensure that the franchisee has valid and valuable IP rights and that no unauthorized competitor can benefit from an unauthorized connection with the franchise.

Who signs the contract? First of all, be absolutely sure of the identity of the party with whom you are doing business. Is it the parent company that signed the agreement, or is it a master`s degree holder? Have you studied the business record and the reputation of the other party? You need to know exactly who the other party you will be working with for the duration of the contract is. It is necessary to specify how the franchisee may use the franchisee`s intellectual property. It is also necessary to highlight, in the franchise agreement, the prohibition by the franchisee from using the trademark; after the termination of the franchise agreement. Sale or transfer of your franchise: What control does the franchisee have over the sale or transfer of your individual franchise? Does the franchisor have a right of authorisation/veto over potential buyers? What is the percentage of the franchisor`s sale and when does it have to be paid? Franchisors do ongoing marketing and promotions to increase their brand power and visibility. As a general rule, the franchisee promotes the brand and the franchisee is responsible for contributing by participating in branding activities.. . .

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