Negotiating A Franchise Agreement

The way you see it is to ask the franchisor, “If my lawyer finds a single word in the agreement that needs to be changed, can we talk about it?” Quite simply, if the answer is no, then the agreement is not negotiable. If the answer is yes, it means that everything in the agreement is a fair game, and they will negotiate everything. In addition to some regulatory issues that have negotiated changes, the main reason franchisors regularly refuse to discuss changes may be related to the management of their business. The terms of the offer should allow a franchisor to manage a chain of independent businesses using the franchisor`s brand and system. The fact that each franchisee works under another contract is not effective and creates potential difficulties for the franchisor in managing its brand and also in its relationship with each of its franchisees. You can also get your franchisor to agree not to change your agreement (or at least certain conditions) for each site you develop. In particular, with respect to post-fine and post-expiration restrictions triggered after the end of the franchise relationship, their legal strength should be carefully considered and, if necessary, negotiated by an experienced franchise lawyer. If you are considering buying a truly successful franchise system that does not negotiate your franchise agreement, your decision will be relatively straight. Do you want the franchise or not? If you do, you will sign the agreement like everyone else. If not, no. This is the exact situation you find yourself in when you buy your insurance policy – although it certainly deserves more consideration. Finally, signing your franchise agreement is a potentially changeing decision.

A potential buyer and his or her franchised lawyer should assess these issues and assess which of them should be negotiated and to what extent. As I said, most really good franchises will not negotiate their contracts. This is because these companies generally have a strong balance sheet, successful and lucky existing franchisees, a strong brand and a strong operating system and, most importantly, a steady flow of people who want to become franchisees in the system.