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 that if you do operate your business in accordance with their system you will be successful and, of course, from a franchisor’s perspective it is trying to create a brand whose reputation is based on a consistent approach and, therefore, the franchisor needs all franchisees to perform their obligations to the same high standards.
In view of the above, the franchise agreement and, in particular, the operations manual, which deals with all of the day to day operational issues, that will affect how you operate your business, will have to be complied with. The franchise agreement will impose very draconian remedies for the franchisor if you fail to comply strictly with all aspects of the system – franchisees simply cannot pick and choose which sections of the system they wish to comply with.
In practical terms this means that you will have to keep your accounting records in the way that the franchisor stipulates, maintain your van or premises very much in accordance with the franchisor’s requirements, accept restrictions on maximum prices, ensure that you and all of your staff are fully trained and make efforts to promote and extend your franchise business.
Written by: John Pratt
Partner, Hamilton Pratt