Franchise Agreements

Report on Franchise Agreements

Introduction

This report was requested by Mrs C Brady on 24 March 2011. The report, to be completed by 7 April 2010 , gives information about franchise agreements and their advantages and disadvantages. The report includes recommendations.

Information was gathered in the following ways:

1. “What is a franchise? All about franchising” was read.

2. http://www.whichfranchise.com/feature_template.cfm?featurer was accessed.

3. The following Internet sources were researched:

htthttp://www.whichfranchise.com/finance/p://www.whichfranchise.com/finance/

http://www.whichfranchise.com/finance/article.cfm?featureId=130

Findings

1. What a franchise agreement is

A franchise agreement is a contractual binding document between the franchisee and the franchiser. The document shows the terms agreed upon by the two parties involved. The document must clearly state the rules both parties are obliged to follow by the both parties and defend the interests of both parties. There is no single-set-standard type of franchise agreement. The particular terms, conditions, and the methods of operating of different franchises will be widely varied depending on the type of business involved in the agreement.

2. Different types of franchise agreements

There are four main kinds of Franchise agreements. Single Unit Franchise, Multi-Unit Franchise Area Developer Franchise and Master Franchise. These franchises function under various strict guidelines set and agreed on with the established franchisor.

Single Unit Franchise – Franchisee will own and operate a single unit. Usually one unit within a certain limited geographical area. This allows the franchisee to be more involved that if they operated more than. This kind of agreement is commonly used by first-time franchisees whom wish to gain experience before venturing into bigger agreements.

Multi-Unit Franchise – The franchisee will be able to open and...