Franchises 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.