CONTRACT CLAUSES THAT MAKE ENFORCEMENT PRACTICAL

When a non-complying franchisee cannot be talked into following the system, you may need to enforce the franchisor’s rights under the franchise agreement. In the worst case, terminations for violation of the agreement are always possible. That’s a drastic step that often leads to litigation. At the Franchise Law Source, we counsel clients to include in their franchise agreements enforcement rights and other clauses that allow them to take effective steps, short of termination, to push franchisees into complying.

Get the Right Terms and Conditions for Compliance in Your Agreements
We encourage clients to include terms and conditions in their franchise agreements which:

  • Create a “good standing” status which franchisees must earn to enjoy certain benefits such as free or discounted point-of-sale marketing material.
  • Provide a clause requiring retraining or additional training for a franchisee out of compliance.
  • Make it a requirement that the franchisee pay the franchisor for intensive in-store operations support from the company’s operations staff in the event of noncompliance
  • Require mandatory mediation of disputes over compliance issues
  • Require mandatory participation in mentoring programs.

By reserving such rights and creating such obligations in the franchise agreement, the franchisor arms itself with weapons against non-compliance. At the Franchise Law Source, we help clients plan ahead for potential compliance problems with legal tools that work.

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