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"Untouchables" and "Discussables"

Written by: John Power

Article Overview: You should carefully consider which elements of your franchise program you are willng to negotiate, and which parts of the program should not be changed from one franchise sale to the next.

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"Untouchables" and "Discussables"

Large, established franchise companies generally offer their franchises on a non-negotiable basis. This accomplishes the dual purposes of maximizing income while developing a uniform franchise system in which all franchisees have signed the same agreement.

Smaller, and emerging franchisors frequently negotiate some of the aspects of the franchise agreement at the time of the sale by preparing an addendum to the franchise agreement. There are, however, some aspects of the franchise program that you should not negotiate, if possible.

Untouchables: Non-negotiables would include the monthly royalty, advertising contribution, franchise term, renewal and transfer fees, and conditions of violation of the franchise agreement. These should not be changed, if at all possible.

Discussables: There are other aspects of the franchise, even including the initial franchise fee (for new franchisors), which could be discussed and negotiated. The franchise territory is also a matter that is frequently discussed. You may also want to give the franchisee an option of acquire additional locations within a certain period of time.

This will vary from franchisor to franchisor, but if you think in advance about the parts of your franchise agreement that are very important to you, and about which parts you are willing to negotiate, you will be better prepared to make the sale.

More information can be found at: www.biltmorefranchise.com

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Home > Franchises > John Power > Untouchables and Discussables
Article Tags: addendum, dual purposes, franchise agreement, franchise companies, franchise program, franchise system, franchise territory, franchisee, franchisees, franchises, franchisor, initial franchise fee, negotiable basis, period of time, royalty, uniform franchise

About the Author: John Power
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John Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co

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