Before you enter into a franchise agreement, you have to be well aware of the contents of the contract. Since it s a legal contract, it is binding and it requires that both parties fulfill certain obligations especially you, the franchisee

1. Franchise Agreement: 7 Things You Need To Know Before You Sign
Before you enter into a franchise agreement, you have to be well aware of the contents of the
contract. Since it s a legal contract, it is binding and it requires that both parties fulfill certain
obligations especially you, the franchisee.
Before concurring into any franchise agreement you should be comfortable with all the stipulations
demanded. To weigh your options and negotiations you must have your franchise attorney with
you. Before you arrive to the point where you are negotiating your franchise agreement, there are
steps that need to be observed.
Make sure that the franchishor will permit negotiations with the terms of agreement. However,
some franchisors openly mention that they are do not welcome negotiations while others are okay
with it. You must also let your franchise attorney review the agreement so that he may identify any
possible issues even though you cannot negotiate the agreement.
You have to recognize that there are certain terms in a franchise agreement that are non-
negotiable. These terms include the royalty fees, territory size, termination provisions and length of
the agreements. These provisions are untouchable. It is very rare if you find a franchisor who
agrees to change these provisions.
Make it clear with the franchisor that you will not be held liable for any loss or damages that are
not caused by you or your employees directly. You can request for written language on this to
make things clearer and legal as well with both parties signing the agreement with a franchise
attorney.
Do remember to review the provision on spending for advertisements. During the first few years of
operations, franchisors offer discounts.
Be sure to check with your lawyer if you have some inquiries in some sections of the negotiation.
Keep in mind that the agreement is complicated and has a tendency to favor the franchisor. Now
before you sign on the dotted line, make sure you fully understand your obligations and
comfortable with the final agreement.
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