Before making franchise agreements, there are lots of things to be kept in mind. The agreement must be made by following laws and code of ethics. Franchising is a process of marketing goods or services which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the Franchiser and its Individual Franchisees whereby the Franchiser grants its Individual Franchisees the right, and imposes the obligation, to conduct a business in accordance with the Franchiser’s concept.
In the process, franchise agreement is the term which holds a great importance. A document is prepared which connects franchisees and franchisers and define the proper responsibility of each other. Franchise agreements are prepared by franchisers under the guidance of some legal person like any of the franchise lawyer. In preparing the document, there are various essential terms which are to be kept in mind. These terms include:
-Proper documentation of the rights granted to both franchisers and franchisees. -Clearly mention the services and the goods provided to each franchisee. -Proper documentation of the responsibilities that both franchisees and franchisers have to accomplish. -Add the payment terms for individual franchisees and mention the duration of the agreement. -Keep in mind that the duration of the agreement should cover the period of time in which the franchisees can repay their investments to the particular franchise. -Mention the requirements on which the person can surrender the franchise agreement. -Mention the rights of the franchisers through which they can adapt the franchise system which their innovative and also some old methods.
The agreement is finally get signed by both the entities when they feel like they are truly agreed with all the terms and conditions mentioned in it. They can ask for the change in any clause which they think is not appropriate or cannot be followed.