Key to buying and owning a franchise is understanding the franchise agreement. This agreement is a document that spells out the relationship between the franchisor and the new owner. It is legally binding.
A franchise agreement should describe the following things:
- How the business should be operated
- The role of the franchisor
- Marketing requirements
- Fees or royalties
- Repair and maintenance requirements
Franchise agreements are intended to not only keep the franchisor and the new business owner on the same page, but also to help both parties steer clear of potential problems that may crop up in the future. This document is also intended to ensure that each location is operated exactly the same way as the other locations within the system. It will also include details about how any issues or defaults will be handled.
These agreements are more favorable for the franchisor. This person or entity has the right to decide how the system’s products or services will be marketed and sold. As such, you should review the agreement carefully before you sign it. It’s also a good idea to have an attorney peruse it and advise you of any potential problems you could face as an owner.
Help With Buying and Owning a Franchise
At MatchPoint Franchise Consulting Network, we’ll help you choose a profitable business, assisting you with understanding which business models best suit your talents. We take the mystery out of owning a business, providing free online education modules to ensure that you can make the most of the available opportunities. You can begin your search for your own profitable opportunity by scheduling a free consultation with one of our experts.
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Between 2004 and 2005 over 300 new franchise concepts were launched in the US.
In today’s high growth franchising industry, 1 new franchise opens its doors every 8 minutes of every business day.
The execution of business requires a strategy and top talent.