Details about franchise agreements
Most new business starters opt for franchising as it offers better benefits over self-owned businesses. If you are planning to buy a franchise then make sure that you get it from a reputed franchisor.
In simple terms, a franchisor is a person who is the owner of the parent company. The franchisee is the one who buys a franchise and becomes a local operative of the system. In the whole franchising process, the franchise agreement plays a key role as it determines all the obligations and responsibilities of the franchisees and franchisors.
The significance of a franchise agreement
There is no specific legislation which governs franchise agreements in the UK but the British Franchise Association have some general rules which need to be followed. In order to be a member of BFA, the franchise agreement should have the European Franchise Code of Ethics.
General issues covered in a franchise agreement
First of all, the agreement should cover the term or how long the franchise will last. If there is a renew option then it will also be mentioned in the agreement. The second point is the territory which means the working area of a franchise. The franchisor’s fee is an important factor which is also covered in the franchise agreement. All restrictions will also be mentioned in the agreement. Make sure you fully understand all the terms and conditions before you sign on the dotted line and make your new franchise a success.