There are good reasons why franchisors generally do not negotiate contracts. Most franchises have been around for years and have developed successful business models. They generally know what works much better than their franchisees, so they insist that the contract be established so that they know it will work well for themselves and for franchisees. Of course, it is necessary that the franchise agreement contain certain provisions that deal specifically with the fact that the site has not yet been found at the time of signing the franchise agreement, including: Non-Competition Agreement: Prevents the franchisee from opening a business likely to compete with the franchise. There are two parts: in-term and post-term. The term period refers to the period during which the franchise agreement is active. The additional portion covers the period following the expiry or termination of a franchise agreement. Duration of the franchise agreement: the course of the franchise. After signing, the franchise agreement governs your relationship with the franchisor, and any disagreements or misunderstandings are subject to the terms of the contract.
Your lawyer and accountant are the best familiar with your individual situation, so ask for their opinion on the terms of the franchise agreement that you should amend to make them more favourable to you. Make sure you understand all the effects of the agreement before you sign it. Several strategies have been developed by franchisors to deal with such situations, including (i) signing a rental offer on the condition that a franchisee operates a franchise on that site, (ii) signing a territory booking agreement (with or without a down payment), (iii) signing an offer (or application) for a franchise (again with or without a down payment) iv) the formation of a bank of potential franchisees waiting for their commercial premises and v) signing the franchise agreement before finding the location of the franchise operation. The agreement must also be flexible enough to allow the franchisor to make contractual changes that reflect decisions made in response to the specific needs of franchisees. However, there is no change to the provision that franchisees must manage their independent businesses on a daily basis in accordance with brand standards. Basically, this aspect of the contract determines how, when and under what conditions you can sell the business. It is always advisable to have a good exit plan before investing in anything, so you know what your rights and obligations are with regard to the sale of the franchise business.
