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Tuesday, August 24, 2010

Never Make the Mistake of Ignoring a Franchise Agreement

Starting a business is a very big step in an entrepreneur’s life. Buying a franchise business is a good idea but remember for this you need to invest your hard earned money. A top franchise business opportunity never comes cheap, so it is advisable to research properly before buying a franchise business.

As the success rate for franchise-owned businesses is significantly better as compared to many independently started businesses, entrepreneurs everywhere are willing to invest in franchising opportunities.

Well, once the decision of starting a franchise business has been made, the real work for the aspiring entrepreneur begins. There are many things that need to be considered and the first thing that must be in the top of your priority list is the franchise agreement. A franchise agreement is basically a contract between a franchisee (Investor) and the franchisor (owner of the business) which allows the rights to the franchisee to use the owner's trademark, trade name or advertising symbol. In exchange for this right, the franchisee pays fees to the franchisor. This legal agreement offers the right to a franchisee to use the trademark, brand name and logo of a well known entity.

There are end numbers of things that are mentioned in a franchise agreement such as what loyalty fees should be paid, what type of support the franchisor will provide to the franchisee, what type of materials will be offered to the franchisee, what marketing and promotional strategies must be followed by the franchisee and so on. Also in this legally binding franchise agreement exact details of all the responsibilities and expectations for the franchisor and franchisee are mentioned.

A well written franchise agreement helps in avoiding any disputes afterward between the franchisor and the franchisee. To make sure that a franchise agreement is written in favor of both the parties, you need to consult a lawyer. Discuss about the franchise agreement with your lawyer before signing it. Remember once signed, both the parties are legally obligated to uphold all the provisions of the agreement. So never ignore the importance of a franchise agreement if you plan buying a franchise business.

2 comments:

becka dalton said...

There are many other items that are displayed in a franchise document. It is absolutely necessary, as you can see that you allow yourself time to get familiar with the different items in the agreement before you sign on the dotted line.

franchise for sale

payal Patel said...

Can't agree any less about being careful before signing.
And we don't hide or cover anything critical from our aspiring education franchise owners.
All your blogs are worth a read.

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