When a franchisee company expands its brand name through franchising it must draw all the franchise agreement. The franchisor will need to list the terms and conditions in which they will grant of franchise to the franchisee. Generally most franchisors have a specific business model and stipulations, which must be followed, as per the confidential operations manual.
One of the first sections in the franchise agreement will be the grant and rights of the franchise. That is to say, exactly what the franchisor is offering to the potential franchise buyer of a franchise outlet. In the disclosure documents this must be clearly outlined and done in plain English as to be easily understood to prevent litigation down the road. Below is an example of the section of the franchise agreements called grant of the franchise that I used in my franchise company and perhaps this might help you with ideas;.1.
FRANCHISE AND TERM.1.1 Grant of Franchise.Franchisor grants to Franchisee, and Franchisee accepts, the right to use the Marks and the Car Wash Guys System of Franchisor in the operation of a business (the "Franchised Business") at a location (as defined below) in the city and country (the Marketing Area") on the terms and conditions set forth in this Agreement. Franchisee may not use the Marks in any other business or offer any products or services, which are not included within the Franchised Business without the prior written consent of Franchisor.
Franchisee must provide: (1) mobile car washing and waxing services (the "Core Services"). At Franchisee's election (which election may be made at the date hereof or at any time during the term of the Agreement), Franchisee may provide automobile and light vehicle fleet washing ("Optional Services"). Franchisor reserves the right to introduce or eliminate any Core Services and Optional Services during the term of this Agreement as part of the Car Wash Guys System, provided any such additions must relate solely to cleaning, washing and waxing of automobiles and fleets of light vehicles.
Franchisee shall be required to provide all such services that Franchisor designates as Core Services.In the event that, subsequent to the date hereof, Franchisee elects to provide any Optional Services offered as part of The Car Wash Guys System other than those listed herein, they must receive written permission. To the extent that Franchisee elects to provide any Optional Services during the term of this Agreement, including any renewal hereof, Franchisee shall at all times thereafter continue to provide such Optional Services unless and until Franchisor eliminates such service from The Car Wash Guys System. The Core services and any Optional Services, which Franchisor elects to provide during the term of this Agreement are collectively referred to as the "Services".---------- ------------ ----------.After a franchisor comes up with a good description of their offer to be listed in the franchise agreements, then they must take it to a franchise attorney to make sure that fits the criteria to protect the company from future litigation.
It is advised to seek professional council on this matter at the earliest possible point. Please consider this in 2006.
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By: Lance Winslow
