Many people join a franchise as a cheap way of going into business for themselves. Sometimes it works out well and sometimes it doesn’t, for various reasons. It is important to understand franchise contracts before you sign up. These have been drafted by experienced commercial lawyers and are quite comprehensive.
Here are 10 points to consider when it comes to franchise contracts.
- The contract for a franchise is non-negotiable. If something does not suit you, there is no way to change it. This is because companies that run franchises find it easier and fairer if all their franchisees are on the same page.
- If there is something in the contract that you don’t understand you can ask for a letter of clarification. This will usually be given because it helps to establish trust between the two parties.
- If the franchise you have decided to buy agrees to negotiate certain terms, it should be considered a red flag, since typically these contracts are non-negotiable. It could mean that they don’t have many franchisees because the product is simply not selling well.