The Importance of Collective Action Clauses: Flexibility for Your Franchise

In “Collective Action Clauses: FDD Flexibility for Franchisors” Charles N. Internicola discussed how collective action clauses – if structured and implemented properly – can add flexibility to your franchise system.  Essentially‚ collective action clauses allow a franchisor to implement a new fee or markinging measure (even if such right does not exist in your franchise agreement) if the measure is approved by a majority of franchisees.

If you are a franchisor‚ does your franchise agreement include a collective action clause?  If you are looking to franchise your business‚ consider the benefit of collective action clauses and discuss with your franchise lawyer the proper way to implement such a clause into your franchise agreement.

By Charles Internicola October 1, 2012