IS THIS FRANCHISE AGREEMENT FAIR?
Understanding the "Franchisee Bind"
come to us and ask “Is this franchise agreement fair?” They
worry about all the detailed obligations of the franchisee and the drastic
remedies in the franchisor’s hands. They wonder why the franchisor
assumes so few obligations itself under the franchise agreement.
need to work with a counselor versed in franchise industry practice
and in franchise law and regulation. Franchise agreements are unique
among business contracts, and lawyers not steeped in franchise practices
may not understand the agreement.
The unique community
of interest that exists between franchisee and franchisor and among
all franchisees in a franchise system creates what we call the “franchisee
bind.” The individual franchisee relies on the franchisor to make
sure that all franchisees perform in the best interest of the brand
as a whole. Therefore the franchisee actually wants the franchisor to
have extraordinary rights and powers. Otherwise poor performing franchisees
could drag the system down.
So, being intimately
familiar with franchising is necessary to negotiate a good deal for
will tell you that the agreement is not negotiable, it is rare for us
at the Franchise Law Source not to find certain things in a franchise
agreement that need to be changed. Rarely have we represented a franchise
buyer for whom we did not negotiate some changes in the franchise agreement.
Knowing what is negotiable and what is not is the key to successful
negotiation and efficient use of your legal fees.
us to help you understand what you don’t need to negotiate
and help you secure the contract modifications that will make your franchise
a good deal for you.
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