Document Franchisee Obligations
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What does the franchisee have to do?
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
- 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
- Owner's participation/management/staffing
- Records and reports
- Inspections and audits
- Post-termination obligations
- Non-competition covenants
- Dispute resolution