One of the ways of starting a business is by starting a franchise. In this manner, you can take advantage of the publicity that a company has gained over time, as well as a business model that has proven to work. Starting a franchise usually reduces most of the work that is usually needed to make the company known during the early stages of its development, which directly influences its growth and profitability.
In order to start a franchise, though, one usually has to get permission from the franchise holder, or the original company. The agreement to start such a business usually encompasses many issues including the terms and conditions that the franchisee will need to uphold in order to continue having the right to run the business. This usually includes details on how to maintain the quality of service provision, so that the parent company’s image is not tainted.
A franchise agreement also has to be signed by the two parties. This is usually a very detailed document which has the terms, conditions and obligations for the franchisee and franchise holder. Franchise agreement details differ depending on jurisdiction and the type of company in question. However, there are a few things that are fairly common among them.
Some of these include details about trademark use, license rights, franchisors services, franchisee obligations, non-compete clauses, confidentiality and more. A watertight franchise agreement has to be drafted in the presence of an experienced lawyer for it to be effective and legal. The individual seeking to start the franchise business also has to thoroughly understand the franchise terms before signing the document.