Always seek
professional opinion about the fairness of the contract. For
the protection of your interests, it should
state:-
- The Term ....
and your right to renew without onerous conditions and without an
onerous fee,
- The
obligations of both parties. The Franchisor’s obligations
should include the provision of, among other things, training,
advertising, marketing, purchasing, research and development and
future support,
- The Fees -
payable initially and on an ongoing basis,
- How the
spending of the advertising levy is accounted for,
- The
arrangements for the continuation or disposal of the business in
the event of your incapacity or death,
- A cooling off
period so that you can reconsider any hasty decision, as required
under the ‘Code’.
In
particular, be careful about Contracts which
include:
- High fixed
management fees. These could be onerous if expected
performance is not achieved,
- Clauses which
release the Franchisor from liability for goods they
supplied,
- Clauses which
allow the Franchisor to buy customers from you at their option.
This may be valid in some circumstances, but be sure you
understand the structure.
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