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Franchisee Services
Franchise Agreements, Franchisee Rights and the Introduction of "National Accounts" in a Franchise System
As service and product based franchise systems (such as home repair, computer support and ink suppliers) develop and expand their franchise base across the nation, issues arises as to a franchisors procurement of "national accounts" and how the terms of any agreed upon "national contract" will affect the revenues and profitability of franchisees.In a recent article on this topic, "Franchisees Balk at Handyman Plan", Wall Street Journal columnist Richard Gibson discusses Mr. Handyman International, LLC's negotiation and introduction of a national service account contract with Wyndham Hotel Group. Mr. Handyman International, LLC, as franchisor, is negotiating and implementing a contract providing for repair services to be provided by its franchisees to certain hotel properties of Wyndham Hotel Group.
For franchisees the introduction of a national accounts may represent added revenue and profit opportunities. However, the "devil is in the details" and the terms of any "national contract" must be closely examined by franchisees. Some important factors for franchisees to consider, include:
- Does the existing franchise agreement "carve out" national accounts from the franchisees "protected territory";
- How will national accounts located within a particular franchisees territory be services;
- Does the "national account contract" fix fees and are the agreed upon fees profitable for franchisees;
- Does the franchisor require a higher royalty on fees generated from "national accounts";
- Will franchisees be required to "bid" on servicing national accounts;
- What fees will the franchisor charge for managing national accounts.
For individuals considering the purchase of a franchise consider and discuss with you franchise lawyer the scope of your protected territory, whether or not national accounts are excluded from your territory and any protections that you could implement into your franchise agreement respecting a franchisors future development of a national account.
Charles N. Internicola is a franchise lawyer who represents individual and established franchisees throughout the United States, in all fifty states, including New York and New Jersey. Charles is the author of "An Entrepreneurs Guide to Purchasing a Business or Franchise" and the editor of the "Franchise Law Blog". If you a buying a franchise, it is important that you obtain an independent evaluation of your franchise agreement and FDD from an experienced franchise lawyer. Contact Charles Internicola to discuss the services that he offers to protect franchisees before you sign any agreements.
If you are considering the purchase of a franchise or business, for a limited time you may receive a complementary no obligation copy of Mr. Internicola's book, "An Entrepreneurs Guide to Purchasing a Business or Franchise" where you will find helpful information and facts.
IMPORTANT DISCLAIMER: The information contained on this website is provided for general educational purposes only, should not be relied on as legal advice and does not serve to create an attorney client relationship. In utilizing this website you acknowledge that there is no attorney client relationship between you and Charles N. Internicola, Esq. and that the information contained on this site does not and cannot serve as a replacement for the competent legal advice of a licensed attorney in your state. The content of this website is subject to the Copyright of its author, Charles N. Internicola, Esq.
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- What is an FDD (Franchise Disclosure Document)?
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