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What Are My Rights Under The Franchise Agreement?

Understanding Your Rights Under a Franchise Agreement

Territory, Royalties and More When Buying a Franchise

If you are considering buying a franchise, then you should know what rights will be provided under your franchise agreement. When you sign a franchise agreement you will be acquiring legal rights and you will be assuming legal obligations. As a prospective franchisee you will need to ensure that the business rights that you believe you will be acquiring match the legal rights and obligations contained in your franchise agreement. So part of the due diligence evaluation that you must undertake before signing a franchise agreement will include an evaluation of your legal rights, including:

  • The protected territory that you will be granted;
  • Whether you are eligible for a "right of first refusal", in regards to opening new franchises within proximity of your protected territory;
  • The royalties and advertising fees that you may be required to pay;
  • Your ability to transfer or sell your franchise in the future;
  • Restrictive covenants that may limit your ability to own or work in a different business in the future; and
  • Your ability to limit and cap your personal liability under the franchise agreement.

Learn More (Complimentary Video and Publication)

We recommend that you visit "Buying a Franchise University" a complimentary video series that goes through the franchise buying process and important information about the legal rights and obligations that you will be taking on when you buy a franchise. Also, order a complimentary copy of Mr. Internicola's book "An Entrepreneurs Guide to Buying a Franchise".

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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