Franchisee checklist - the franchise agreement
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Franchisee checklist - the franchise agreement
1. What is the duration of the franchise agreement? It should last for a sufficient period of time to allow the franchisee to recoup his/her investment.
2. Will the franchisor allocate a specific territory? If so, is it exclusive?
3. Will the franchise business depend on the sale of goods? Will the franchisor supply these goods? Will the franchisor control the retail price?
4. Will the franchisor recover income from profit on the sale of goods to the franchisee under an exclusive purchase agreement?
5. Is there a minimum package (stock, equipment or staff) which must be maintained by the franchisee? Does the franchisor supply any, or all, of this package?
6. What are the levels of the initial fee, continuing payments (including advertising contribution) and any other contribution payable by the franchisee? How are they calculated and how frequently are they paid?
7. Does the agreement impose a minimum performance requirement? If so, how much is it and for what period of time? What are the consequences of non-achievement of the minimum performance target (termination, non-renewal of the agreement)?
8. What are the consequences if the franchisee becomes incapacitated or dies? Will the agreement be terminated? Will the franchisor appoint new management? Will the franchisee's family have the option of continuing in the business?
9. Does the agreement comply with the regulations and code of ethics of your national franchise association?
10. What are the conditions under which the franchisor may terminate the agreement? What is deemed to be a "fundamental breach of agreement"?
11. What are the conditions under which the agreement may be renewed?
12. Under what conditions may the franchisee terminate the agreement prior to expiry?
13. Will the franchisee be compensated for any "goodwill" created during the term of the agreement should he/she decide not to renew the contract?
14. Will the franchisor require a block insurance policy or be named on a policy taken out by the franchisee?
15. What constitutes the franchise system's intellectual property rights? Who owns them? How are they protected (patents, registered trade marks etc)?
The relationship between franchisor and franchisee is governed by a contract. It is crucial that you seek professional advice when negotiating yours, preferably from a lawyer who has experience of franchise agreements.
Franchisee checklist the franchise agreement - To learn more about this author, visit Diarmuid Kieran's Website.
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John PowerJohn 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 - Visit John Power's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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