For start-up and established Franchisors alike, achieving uniformity among your Franchise agreements and Franchise relationships constitutes a critical role. So what is the best way to achieve this uniformity: refine and structure your Franchise agreements to achieve a "balanced" approach to issues typically of concern to prospective Franchisees. Some issues to focus on, include:
- The method for calculating royalties where your royalty structure is based on metrics/criteria that are independent of the Franchisees gross sales;
- The method for proscribing and defining the Franchisees "protected territory", if any;
- The method for Franchisees to obtain "franchise fee" discounts when purchasing the rights to multiple Franchise unity.
Open ended Franchise agreements, while tempting, typically create or give rise to "real world" situations that may create unnecessary litigation risk.
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