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* Franchise
agreement
Franchising (from the French
for free) is a method of doing business wherein a franchisor licenses trademarks
and tried and proven methods of doing business to a franchisee in exchange for
a recurring payment, and usually a percentage piece of gross sales or gross profits
as well as the annual fees. Various tangibles and intangibles such as national
or international advertising, training, and other support services are commonly
made available by the entity licensing the 'chain store' or franchise outlet (commonly
shortened to the one word: franchise), and may indeed be required by the franchisor,
which generally requires audited books, and may subject the franchisee or the
outlet to periodic and surprise spot checks. Failure of such tests typically involve
non-renewal or cancellation of franchise rights.
The term "franchising"
is used to describe a wide variety of business systems which may or may not fall
into the legal definition provided above. For example, a vending machine operator
may receive a franchise for a particular kind of vending machine, including a
trademark and a royalty, but no method of doing business.
The parties involved
typically enter a franchise agreement, which binds the parties together through
contractual provisions. This is an arrangement whereby someone with an idea for
a business (the franchisor), sells to another person (the franchisee) the rights
to use the business's name, sell a product, or provide a service to someone else.
A franchise agreement will usually specify the given territory the franchisee
retains exclusive control over (the area protection), as well as the extent to
which the franchisee will be supported by the franchisor (e.g. training and marketing
campaigns). Most franchisee agreements, however, do not provide the franchisee
with area protection because of the disparity in bargaining power between franchisors
and franchisees.
Size : 127 kb
Words : 11430
Pages. : 20
Language : English
Document type : .doc (Microsoft Word)
DOWNLOAD
"FRANCHISE AGREEMENT", CLICK HERE 
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