9 grudzień 2020
General Franchise Agreement
Autor: Anna Pilsniak. Kategorie: Bez kategorii .
In accordance with industry standards, a franchisor often confers on the franchisee the right to grant under-franchised and under-licensed brands and the use of the operating system of franchised units in that territory to a third party, the under-franchised. The franchise rule requires that a potential franchisee be provided with a franchise publication document (FDD) that details 23 „items” for the franchisor`s business. An FDD aims to give potential franchisees a clear picture of the activities of the franchisor, its executives and other franchises. Some of the 23 „points” required include past or ongoing franchise litigation, the financial health of the franchise, training and other support programs made available to franchisees by the franchisor, a list of existing franchise outlets, and the franchise`s trademarks, copyrights and patents. Before a franchisee signs a contract, the U.S. Federal Trade Commission regulates the disclosure of information under the control of the franchise rule.  The franchise rule requires that a Disclosure Document (FDD) franchise be made available to a franchisee (originally a uniform offer circular (UFOC) franchise prior to the signing of a franchise agreement, at least fourteen days before signing a franchise agreement.  The obligations of franchisee masters in relation to their sub-franchises Finally, development agents and franchiseees may provide technical assistance and training to franchisees, although development agents are not permitted to use trademarks or operate franchised units. When entering into a franchise agreement with a franchisee, a franchisor must take into account the fact that where the parties mistakenly include certain provisions of the franchise agreement that can be construed as constituting or creating an employment relationship between the franchisor and the franchisee`s workers, and when an action is in progress. , the courts have sufficient powers to determine whether the franchisee could be an employer of the franchisee`s workers. This risk must be taken into account in the franchise agreement and the parties must agree that the franchisee compensates the franchisor for any action brought by the franchisee`s staff against the franchisee. Franchise agreements are governed by federal and national law.
First, a Federal Trade Commission regulation, the franchise rule, regulates initial interactions between a franchisor and potential franchisees. The full text of the franchise rule and a compliance guide prepared by the FTC are available on the FTC website. This contract describes the franchisee`s territory (exclusive or not) and sets a timetable whereby the franchisee must find a stationary site, have the unit`s plans approved and be expanded and open. Other issues may also be disclosed in this section, such as the computer equipment needed to operate the business, etc. As stated in the Grant of Franchise section, the franchisor only issues a temporary license to the franchisee. Most franchisors will force this understanding by adding a specific language identifying each item that constitutes its proprietary, confidential and commercial information, and then indicating the restrictions imposed on the franchisee`s right to use such information. This is an important protection for the franchisor and is generally not a contract that is lacking in the franchise agreement. It is customary to include provisions in the main franchise agreements allowing the franchisor to terminate the franchisee`s exclusive rights in the event of a breach of its obligations. In this case, the franchisor may then have the right to enter into agreements with third parties in order to further develop the franchise within the territory.