Types of Franchise Structures (Part B)

When starting a franchise in New York, the significant elements of an area development agreement are:

• the definition of territory, including exclusivity rights and exceptions;
• the number of outlets to be developed;
• the time frames for development;
• franchisor assistance in development;
• fee obligations;
• site selection and approval responsibilities of the parties;
• transferability of the development rights apart from the franchised businesses; and
• termination and its consequences (the effect of termination of the development agreement on existing individual unit franchises and the effect of termination of unit franchises on the development agreements and other unit franchises).

Before agreeing to any terms, you should go over the franchise agreement with your New York franchise lawyer.

Other Terms Under the Franchise Structure

When you start a franchise in New York, other important terms that you'll want to consider in your franchise structure include:

• the possibility for sub-franchising;
• your territory;
• termination;
• the fee structure; and
• development obligations.

When establishing the structure for your franchise in New York, your New York franchise lawyer should go over the terms of your agreement, and make sure that the terms and conditions have been established adequately.

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