The decision to buy into a franchise can lead you to financial success. You may have the chance to operate a successful business in your community for decades. However, not every franchise opportunity turns out to be the dream career people expect.
A thorough review of your franchise agreement can help you avoid some of the pitfalls to which other people fall prey. Since these agreements contain many terms and clauses, you might not know what to look for in the document. An ideal way to get started is to look for the following critical provisions.
It should contain marketing provisions.
Your success is also the franchisor’s success. Most reputable franchisors agree in writing to help you advertise and market your business. If the agreement lacks these provisions, it could be a red flag.
It should speak about your “territory” and boundaries.
The last thing a franchisee needs is to compete with the same brand. Look for terms that ensure your region will not suffer from franchise oversaturation.
It should include provisions for training and support.
A good franchisor wants you to succeed and is willing to help. Ensure that your franchise agreement contains provisions addressing training and support before opening and throughout the agreement term.
It should contain details about expenses and fees.
If the agreement contains vague language regarding the fees and expenses you must pay out-of-pocket, ask for clarification and additional details. If the franchisor refuses, perhaps you should consider a different franchise.
The sections above represent only a few of the provisions a well-drafted franchise agreement should contain. Before you sign on the bottom line, consider arranging a professional review of the document. It is also wise to become familiar with the franchising laws in Minneapolis and across the nation.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.