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Document Franchisee Obligations
You’ve discussed general roles and responsibilities with your prospective franchisee. Item 9 of the Uniform Franchise Offering Circular (UFOC) formalizes the franchisee’s obligations. It also cross-references the items to the corresponding sections of the Franchise Agreement that will be the legal contract between you and your franchisee.
Franchisee obligations typically include:
Site selection and acquisition/lease
Pre-opening purchases/leases
Site development and other pre-opening requirements
Initial and ongoing training
Opening
Fees
Compliance with standards and policies/operating manual
Trademarks and proprietary information
Restrictions on products/services offered
Warranty and customer service requirements
Territorial development and sales quotas
Ongoing product/service purchases
Maintenance, appearance and remodeling requirements
Insurance
Advertising
Indemnification
Owner’s participation/management/staffing
Records and reports
Inspections and audits
Transfer
Renewal
Post-termination obligations
Non-competition covenants
Dispute resolution
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