The franchisor should certainly not choose a franchisee on the basis that he or she has a “pulse and a cheque book”! this does mean that when you show interest in a franchise you need to be vigilant to ensure that the franchisor is thoroughly investigating your application and that indeed it is a “challenge” […]
Franchise agreements are drafted by the franchisor’s legal team to protect the franchisor but, nevertheless, should contain clauses which benefit franchisees. Whilst not all franchise agreements grant exclusivity and exclusive territories are not as exclusive as they once were, knowing that there will be no competition from the franchisor or other franchisees within a defined […]
The manual is an extremely important document because it contains the huge majority of a franchisor’s know how, technical information and experience. This does mean that a prospective franchisee will be able to tell a great deal about the value of the franchisor’s “System” from the manual. Nevertheless, from a franchisor’s point of view, because […]
The answer to the question would run to many pages! Restrictions are contained in both the franchise agreement and in the operations manual. Their purpose is to make sure that franchise owners operate their franchise business strictly in accordance with the franchisor’s requirements. The reason for this is simple – franchisors know, or should know […]
All franchise agreements contain both in-term non compete clauses and post term non compete clauses. In-term restraints prevent franchisees and the principals who have established the franchise from competing during the term of the franchise agreement. Franchisees and their principals are generally also required to devote their whole time and attention to the franchised business […]
The theme of this article is that the litigation tide is moving away from franchisors and that currently litigation is the biggest risk for franchisors in the UK. The article seeks to set out why that may be so. There is an inherent conflict in franchising. At the beginning of the franchise relationship the franchisor […]
There are a number of important terms that pretty much all franchise agreements use. Often these terms are defined in the agreement because they are used several times in the agreement itself. The purpose of this article is to look at the likely meaning of these terms although, in all cases you should look at […]
As every franchisor knows having effective non compete covenants is essential to maintain the integrity of a franchise system. These non compete provisions are often the most litigated clauses in franchise agreements. Generally non compete covenants in UK franchise agreements last for the duration of the franchise agreement plus a year and relate to the […]
As a prospective franchisee there are several things that you should bear in mind when you first make contact with a franchisor: How much do you actually know about the franchisor and its business? – Do your research! Although the franchisor is the “big guy” don’t be afraid to ask questions. You need to be […]
There are four basic elements of a franchise and one of these is the right to use the franchisor’s brand. A brand is a key component yet one that is often overlooked by prospective franchisees. A brand is something that differentiates one business or trader from another. It can be a name, a symbol, or […]
