Franchise Agreements Problems

A franchisee should reasonably expect a quality franchisor to provide:

- A written manual for running the business that is proven to work.
- proof that the way the business will work will generate money.
- Ongoing input to the business to keep your brand alive and in the market.
- Education about the documentation and continued amendments to it.
- Solid initial training and support to get your business up and running, including support with marketing and sales to get your first customers in the door.
- Truthful discussions during the purchase of your business.
- How to quickly get out of the business should the need arise because of personal issues.
- Fast, effective release from your contractual obligations in the event of your business failing to become profitable within a fixed period.
- Being able to get out of the agreement in line with the franchisor's ability to get out.

Being unwilling to agree to many of these terms (i.e. not having full confidence in the product they are selling to you), yet still wishing to carry on with a deal in selling the franchise to you should cause you to think about what might happen regarding your contracted agreement should things not work to plan and end up in some sort of messy conflict further down the road.

For a franchisor, the aim of selling franchises is to sell as many as possible, as fast as possible and with the minimum amount of risk. I'd prefer to see the risk shared between the franchisee and the franchisor and if your contact is not willing to spread the load then I would consider the fact that you are just as likely to have a working, profitable business if you do something else for yourself.

The franchisor might detail many things that could possibly happen, but be wary of signing to an agreement you just don't agree with. You may really get on with the seller, you may believe him when he says such issues never arise, but you must remember that you are participating in a business agreement and that it is your business and your livelihood that is in the balance. Make sure you are covered in case one of those never happens problems actually does happen.