NewYork, NY (PRWEB) March 18, 2013
Laws.com added the franchise agreement template to its list of commercial agreements. Franchise is a business replica where the parent business organization gives their consent for others to purchase the right to use their name and do business under the name of the parent business organization. The franchise is entitled for a percentage of profit from the franchised business.
Franchising is the process of using a successful business form, and for the franchiser, the franchise is an option to enlarge business by way of building a chain of stores to distribute their products without investments and burden. The performance of the franchiser is related to the success of the franchisee. The franchisee gets a better remuneration than a direct employee as the franchise has direct involvement in the business.
In terms of distribution of goods, the franchiser supplies the products to the franchisee and the franchisee makes use of the franchisors trade mark to distribute the goods. Many countries including the United States, following the path of franchisee business have certain rules and regulations to legalize franchising. The laws have a direct or indirect force on franchising.
The prime concern is identifying the right franchisee, simply generating incompetent franchisees without knowing the market will lead to problems.
Requirements needed prior to a franchise agreement.
Find out the types of franchisees in a particular area where the franchisor intend to expand. A broad study is needed for the purpose. Most of the franchisors award exclusive rights to a franchisee in a specific territory to avoid the entry of people coming out with the same business.
Knowledge of State and local laws are mandatory to begin a franchisee agreement. The franchisors are scattered in different States, so, the franchisee has to operate in coordination with local laws.
The franchisee has to demand the basic disclosure documents needed by the Uniform Franchise Offering Circular. It’s obligatory to file a yearly UFOC by franchisors in each state, they are operating. The UFOC have the requirement of financial and legal transactions of business which is inclusive of securities, investments, training and marketing practices, bankruptcies etc.
Seeking the help of an attorney who has expertise in the field of the franchise agreement will be of much help at this juncture, hand over the required documents to the lawyer for evaluation before putting the signature.
Seeking the advice of a financial expert associated with the franchisor is necessary as the franchisees invest borrowed money in the initial phase of business. The financial stakes are quite high in a franchisee agreement. The franchisor is the one who has absolute control on all facet of business. Study both sides of a franchisee agreement before taking a decision.
Availability of the Franchisee Agreement Template:
Franchisee Agreement is available in laws.com legal forms section and the same can be downloaded by visiting the Franchisee Agreement page.
When the old franchisee agreement expires, to continue in business, a new franchisee agreement has to be made. The new agreement will be entirely different from the previous one and the franchisee will be operating under a totally new and tailored document.
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