When purchasing a franchise or selling one, a franchise agreement is a contract between a franchisor and a franchisee that outlines the terms of the business relationship.
The franchisor grants the franchisee the right to use their name, logo, and operating model in exchange for a fee.
Franchise agreements vary in length but typically last for several years.
Before signing a franchise agreement, it’s important to understand your rights and obligations as a franchisee.
The Process of Purchasing a Franchise and What to Expect
Purchasing a franchise can be an exciting but overwhelming journey. Before making any decisions, it’s crucial to do your research to become informed.
You should expect to dedicate a significant amount of time to researching, determining costs, reading through any contract details, and deciding which will be most successful for your lifestyle.
There is help out there if you’re overwhelmed by the process. Contact the team at Lacey Lyons Rezanka.
We can help assist you in contract law and other legalities of a franchise.
Franchise Agreement
A franchise agreement is an important legal contract that outlines the relationship between a franchisor and a franchisee.
The agreement usually defines the obligations of each party in terms of the following:
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- Start-up costs
- Royalties
- Types of products and services offered
- Trademark protection
- Expected sales revenue
- Other contractual conditions
- By signing this document, both parties are bound to abide by its specific details. Because it covers so many topics related to the operation of a business venture, it’s critical to have a law firm on your side that’s informed.
1. The Franchisor’s Obligations
When purchasing a franchise, it is important to understand what obligations the franchisor has towards its franchisees.
Franchisors must adhere to specific regulations. They must also be transparent with potential buyers about their rights and duties regarding purchasing the franchise.
This includes providing detailed information on franchises that are offered. It’s also essential for franchisors to provide clear guidelines on the termination of contracts or transfer of ownership.
2. The Franchisee’s Obligations
Purchasing a franchise can be an excellent opportunity for entrepreneurs in many industries. But with this opportunity comes specific obligations.
Before purchasing any type of franchise, it’s important to understand the responsibilities associated with being a franchisee.
The franchisee must follow the policies and procedures established by the franchisor.
Also, they must agree to any fees and royalties imposed by the franchisor in order to keep up with their obligations as part of being associated with the brand they purchased into.
When it comes to franchises, there is a lot to know about them. The dedicated team at Lacey Lyons Rezanka is there to help.
If you’re in Brevard County, give us a call! Our attorneys’ legal experience spans many years and multiple areas of expertise.
3. Renewal and Termination of the Agreement
As you are aware, there is a lot to know about purchasing a franchise. The more you’re informed, the better off you’ll be, no matter if you’re the franchisor or franchisee.
Regardless, you’ll need legal representation to understand and aid in the process.
It is crucial to understand the terms of a contract as there is always the potential for restructuring or ceasing the contract.
In legal contracts, agreements can be terminated in two ways:
- Renewal
- Termination of the agreement
4. Your Franchise Rights
It should be clear that a franchise agreement is an incredibly valuable tool for protecting the interests of both franchisors and franchisees.
Upon purchasing a franchise, there are legal obligations each party must fulfill.
When those obligations are violated, it is your right to have proper legal representation.
When considering signing up for any type of franchise business, it’s important to get informed and understand your rights and responsibilities fully.
Remember that making sure you understand all terms laid out in the agreement is crucial in avoiding potential issues down the road.
If you have any questions or concerns about franchising or contract violations, don’t hesitate to contact Lacey Lyons Rezanka today. Schedule a consultation today!