The document governing the relationship.
WHAT IT SHOULD ADDRESS
The rights granted The territory The term and renewal Fees and how they change Standards and obligations Training and support provided Supply arrangements Marketing obligations Reporting requirements Transfer and sale Termination and its consequences What happens afterwards
WHY THE TERM MATTERS
It must be long enough for the franchisee to recover their investment.
WHAT TO ESTABLISH ABOUT RENEWAL
On what basis it occurs, and at what cost.
WHY
Renewal terms determine whether the investment has any lasting value.
WHAT TO ESTABLISH ABOUT TERRITORY
Its boundaries Whether it is exclusive Whether you may operate within it Whether other channels may sell within it
WHY THAT LAST POINT
Selling directly into a franchisee's territory destroys the relationship.
WHAT TO ADDRESS ABOUT STANDARDS
What must be maintained How compliance is verified What happens when it is not
WHAT TO ADDRESS ABOUT TRANSFER
Whether the franchisee may sell Your approval rights Any right to purchase yourself
WHY
It is how a franchisee realises value, and its absence makes the investment unattractive.
WHAT TO ADDRESS ABOUT TERMINATION
What justifies it What notice and opportunity to remedy applies What happens to the premises, equipment and customers
WHAT TO ADDRESS ABOUT POST-TERMINATION
Restrictions on competing Return of materials Removal of branding
WHAT TO HAVE
It drafted and reviewed by a solicitor experienced in these arrangements.
