Document Franchisee Obligations

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What does the franchisee have to do?

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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