When a franchisee company offers for sale of their method of doing business to the public and use of their brand-name they must list the information in a concise format in the franchise agreement. Additionally when a franchisor wishes to expand their franchise system through the use of master franchises, they will need to further describe how the master franchise is expected to go about the selling of additional franchises and give an overview of exactly what is expected in the agreements.Below you will find an excerpt from my company's franchise agreement that dealt with the grant of right to sell franchises under my brand-name.
This may give you some good ideas of how such things are done;.1.1.
1 Grant of Right to Sell Franchises.Once Franchisee Core Services operating franchise has been established and operating for a period of ninety (90) calendar days, Franchisor grants to Franchisee the right to sell to other parties franchises of The Car Wash Guys or Wash Guys Systems (the right to become a "Master Franchise") within the boundaries of Franchisee designated Marketing Area only. If Franchisee has not established and have operational the Core Services franchise within one hundred eighty (180) calendar days of delivery of Franchisee's initial car wash truck/unit, this right may be terminated by Franchisor.------- ------- --------.Of course if you are a franchisor and are considering master franchises as a method of expanding your business model you should also realize that it is not as easy as it looks.
In fact it is quite a litigious industry and therefore you'll need to seek legal counsel and find your self a competent, knowledgeable and an experienced franchise attorney who is capable of drawing up these master franchise agreements. Consider us in 2006..
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By: Lance Winslow