DRAFTING FRANCHISE AGREEMENTSDrafting a good franchise agreement is as important to a franchisor as laying a solid foundation is to a builder. All the future revenues of a new franchisor depend on the ability of franchisees to operate profitably under their franchise agreements. Remember, franchisors own little other than its trademark, its proprietary operating system and its contract rights. If the builder finds his foundation crumbling, his investment is threatened. If a franchisor finds that his franchise agreement is unenforceable or inhibits franchisees’ profitable operation, then he has built a franchise system on a weak foundation. A franchisor with difficulty enforcing its franchise agreement cannot truly run its company and control its brand.
About "Standard" Agreements
The novice franchisor often asks “Aren’t franchise agreements all standard?” The answer is a resounding “No”. Although most franchise agreements cover similar topics, well drafted franchise agreements are customized in many critical ways to match the needs of the particular franchisor and its dealers. Your franchise agreement must embody or reflect your company’s unique business model. “Shoehorning” your business into a “standard” franchise agreement will not allow you to realize the business you have envisioned.Knowing Laws and Regulations is Key
Franchise companies operate in a thicket of state and federal laws and regulations. Few industries are as comprehensively regulated as the franchise industry. Buying a form franchise agreement off of some website is a disaster in the making. Even asking an attorney without extensive franchise industry experience to write your agreements is taking a big risk. Every year dozens of lawsuits are decided and judicial opinions written that change the legal landscape of the franchise industry in important ways. It definitely takes resources to create and periodically update an enforceable and effective franchise agreement. It is no less certain that this is an essential obligation of responsible franchisors. The value of a franchise company is completely tied up in its rights under its franchise agreements. A strong franchise agreement is also essential to protecting the exit strategy of a franchise company’s founders. A future buyer will only pay top dollar for a franchise company whose agreements are strong enough and flexible enough to assure complete control over the brand under ever changing circumstances.At the Franchise Law Source we work efficiently to document the unique details of your franchise business proposition in a strong franchise agreement. We bring years of industry experience as well as our extensive knowledge of the laws and regulations to the table. Let us help you lay a solid foundation for your franchise company by drafting a franchise agreement that creates a mutually beneficial and profitable long-term relationship between you and your franchisees.
The Franchise Law Source will also Prepare and Register your Franchise Disclosure Documents to keep you in compliance with franchise sales laws.
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