4/01/2005

Negotiating a Franchise Agreement

"When it comes to making changes to their franchise agreement certain franchisors will negotiate terms of their franchise agreement while others will not...

Franchisors are not able to simply change provisions in a franchise agreement but rather are guided by franchise regulations, state statutes and sound business practice. However, certain provisions can be negotiated and changed...

Before you even arrive at the point of actually negotiating your franchise agreement there is a process that you’ll need to follow.

1. Engage An Experienced Franchise Attorney To Review The Agreement...

2. Confirm That The Franchisor Will Negotiate Terms Of The Agreement...

3. Recognize That Certain Terms Are Non-Negotiable
Items such as royalty fees, territory size, termination provisions, length of the agreement, non-competes and legal venue are examples of what are considered the “untouchable” provisions...

4. Focus On The Important Points In The Agreement...

Examples of these provisions include:

A. Restrictions on products and services that you wish to sell.
B. Marketing or selling in “open” territories.
C. Indemnification Provisions.
D. Advertising.
E. The Transfer and Assignment Section.

From this franchisetrade.com article.