Franchise Advice
• The franchisee achieving the required targets in terms of sales or revenue, usually measured against the performance of the network as a whole
• The franchisee agreeing to sign the franchisor’s current franchise agreement
• The franchisee undergoing further training to ensure that the business is operating in accordance with the franchisor’s current standards
• The franchisee agreeing to replace and upgrade equipment, vehicles and shopfi ttings where appropriate.
This list is not exhaustive and the
provisions of your own franchise agreement will be the ones that apply to you. The important point to bear in mind is that the right to renew is subject to the conditions in your agreement being satisfi ed. If the franchisee cannot fulfi l the conditions, the franchisor is not obliged to renew the agreement. The condition requiring the franchisee to enter into the current form of agreement, which may contain diff erent terms including diff erent fi nancial provisions, is one that often takes them by surprise.
The assumption is that the right to renew provides the right to continue on exactly the same terms and this is rarely the case. The reasoning behind the condition is that the franchisor may have changed its system during the course of the initial franchise term to refl ect changes in operating practices; there may also be changes in the law that need to be refl ected in the contract. The time of renewal provides the franchisor with the opportunity to bring the renewing franchisee onto the same terms as the franchisor off ers to new franchisees entering the network. The idea is that all franchisees in the network operate on the same contractual terms as far as possible. The time of renewal is an opportunity for franchisees to upgrade equipment and vehicles to ensure that they adopt the new trading style and are able to off er a uniform trading experience to customers. In acquiring a franchise it is important to remember that the franchisor can dictate standards throughout the period of time in which the franchisee holds the licence to franchise.
It is sensible to ask the franchisor well September 2017 |
BusinessFranchise.com | 45
in advance of the renewal date to provide details of the investment required to renew in order to satisfy the franchisor’s renewal criteria. It is not good practice to require the franchisee to pay another full fee, but it is common to pay a small renewal fee, together with the franchisor’s reasonable administrative costs in dealing with the renewal process.
As with so many aspects of the
relationship between franchisor and franchisee it is benefi cial to ask searching questions about the renewal process at the outset and before committing to the franchise investment. This way, you are fully informed of what is required to operate the franchise for as long as you wish to continue.
About the author
Jane Masih is director and head of franchising at Owen White Solicitors
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120
