What Should You Negotiate in Your Franchise Agreement (Part 1)? | Franchise Law Blog

What Should You Negotiate in Your Franchise Agreement (Part 1)?

Negotiating Your Franchise Agreement

So we have previously discussed that franchise agreements are negotiable – they absolutely are. Knowing this though raises the next question which is what terms and provisions should you focus on negotiating before signing a franchise agreement? Alot will depend on your persoanl circumstances and the specifics about the franchise that you are about to purchase‚ however there are certain "universal" negoitiating points that you should be considering.

Some "Universal" Franchise Agreement Negotiating Points to Consider

For example‚ what happens if you sign a 10 year franchise agreement and if after two years (after much effort and capital) you decide to clos your doors? Technically you are in breach of your franchise agreement and technically the franchisor (depending on the terms of your franchise agreement) may claim lost future royalties (i.e.‚ royalties that they would have received if you did not shut down). In such case one franchise agreement modification that you will want to consider will be to limit your personal liablity to "past due" obligations but not future obligations should you elect to close down.

There are other "universal" negotiating points to consider ans we will discuss them in future posts. If you would like to learn more about buying a franchise learn about the 6 Steps that You Should Consider.

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Date: 03/04/2014 | Category: General

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