Creating and taming your Franchise Agreement

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Franchisetein
(Creating and taming your Franchise Agreement)

Regret not knowing the hidden costs of your franchise? Missing any kind of support from your franchisor? Feeling bad for over-franchising your brand? Lamenting the low quality produced by your franchisee? Did not take your franchise agreement seriously, eh? At this point, we can only advice you to settle amicably. Litigation is usually a no-win situation.

But for those who want to avoid the horror stories, then for heaven’s sake, strive a little harder and create your own brand! Of course, if you don’t have the time but have the funds (or, if you’re a franchisor) then continue reading.

For those of you who want to franchise your business (and earn more) or those who want to get a franchise (and earn quicker), you will need a franchise agreement to protect your interests. And it is in your best interests to know (and negotiate) it from beginning to end.

No Franchise Law

Although we don’t have a franchise law to guide us, that hasn’t stopped franchises from sprouting on every other busy street corner.

FYI, the U.S. has the Franchise Rule (or the “Disclosure Requirements And Prohibitions Concerning Franchising And Business Opportunity Ventures“) to help guide the parties.

We may not have anything similar (attention lawmakers!) but the Intellectual Property Code[1](IP Code) prohibits and mandates certain provisions in Technology Transfer Agreements (TTA) and, of course, there’s always the Civil Code provisions primarily on Obligations and Contracts.

The relevant Civil Code provisions are applicable to obligations and contracts in general while the relevant IP Code provisions are specific to TTAs. Hence, we will focus on the latter (as the former may be hopelessly ambiguous for now).

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Read the rest on The Legally Inclined Blog.