7 Ways The Franchise Agreement Benefits The Franchise Operator

7 Ways The Franchise Agreement Benefits The Franchise OperatoFranchises are a great way to make a living. Because franchises have a proven track record and established business processes they offer many of the benefits of owning a business without the risks of starting from scratch. Every foray into the franchise world begins with research, finding the type of business you want to run.

After the research — but before you open your doors — you will need to sign a franchise agreement, a document produced by the franchisor. Many future franchise owners are intimidated by the franchise agreement, but just because the franchisor creates the document doesn’t mean the contract is one-sided. A franchise agreement spells out the role each party plays in the process. It attempts to cover every situation between the parties and when there is disagreement, how that issue will be resolved.

Read your franchise agreement thoroughly before signing it. It explains your obligations as well as those of the franchisor. Though you might want to make adjustments to the agreement, the stronger the franchise, the less likely it is that will happen. It might seem like the company is playing hardball, but there are legal concerns that make it easier for the company to offer the same contract to everyone.

Here’s a look at some of the reasons a franchise agreement benefits the franchise operator.

Costs

The franchise agreement explains all the costs involved in acquiring the franchise. It will explain the fees and royalties for which the franchise operator is responsible.

In exchange for that expenditure, the franchise operator gains the right to use the company’s name and processes. If there are any other fees involved, they will be clearly defined in the franchise agreement. The franchise agreement also defines the amounts and times those payments are due.

Physical Property

7 Ways The Franchise Agreement Benefits The Franchise OperatoThe contract you sign will clarify expectations for type of physical property you will be required to have. For some franchise operators that might include listing the size of the building, equipment and supplies that are needed to get started.

Some Bin There Dump That franchise operators begin their businesses out of their homes, though most expand to an office space in time. The agreement will, however, explain the number of bins and trucks you will be required to start with.

Operating Practices

One of the greatest advantages to running a franchise versus starting from scratch is a set of proven processes. These processes are often spelled out in the franchise agreement.

By signing the document, you’re agreeing to follow the rules and policies the franchisor has created.

Territory

Another advantage of a franchise is the guarantee of an exclusive territory. The customers in your area will not be targeted by another business (at least not one from your same corporation).

Brand Protection

Even if you follow the rules and procedures, deliver exceptional customer service, and uphold your end of the bargain, others might not. When a “bad apple” refuses to maintain the company standards, it can create problems for the brand. And that can infect others in the system.

The franchise agreement will explain under what circumstances a nonconforming franchise operator can be removed from the franchise.

Company Obligations

The franchise agreement indicates not only what is expected of the franchise owner, but also the obligations of the franchisor. The document explain what the franchise operator can expect from the franchisor in terms of training, marketing and support.

The Out

Franchise agreements are often limited in length. If both parties are happy the deal is simply renewed. Franchisors and franchisees go through a courting process long before the time comes to sign the franchise agreement. The goal is find out if both sides are a good fit moving forward. And while they usually get it right, sometimes mistakes are made. Or perhaps something down the road changes for the franchise operator which makes moving forward with the business impossible. The franchise agreement explains how the relationship will end and the obligations of both parties.

To learn more about how you can get started with a Bin There Dump That franchise give us a call at (905) 823-8550, or download our free franchise kit.

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