Franchise agreements

The basics to consider

The franchise agreement is crucial. Don't sign any agreement, or pay any fees or deposit, until you have taken professional legal advice.

Areas covered by a typical agreement

Term: how long does the franchise last? Will you have the option to renew it, and on what terms?

Territory: what area does your franchise cover? Do you have exclusive rights to sell within it?

Fees: what initial fee will you have to pay? What percentage of sales revenue will you pay? Will you pay a regular management fee - and if so, what does it cover? Will you have to pay other costs? How are the costs worked out?

Support: how much help will you get starting the business? What continuing support will you get?
Restrictions: what restrictions are there on what you're allowed to do and how you must run the business?

Exit: what happens if you can't continue in business for some reason - perhaps due to ill health? What happens if you want to sell your franchise?

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