FRANCHISE AGREEMENT – IMPORTANT THINGS TO BE NOTICED

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The franchise agreement, a document which connects the two parties together and describes, often in great detail, exactly what each may, may not and must do during the time where the agreement is in force.

The types of franchise agreement are

  • Single unit franchise
  • The multi-unit franchise agreement
  • Area development franchise agreement
  • Master franchise agreement

Single unit franchise :

A franchisee will invest in a single unit with no commitment or expectation that they will later open any additional locations.

Multi-unit franchise agreement :

The multi-unit franchise agreement is where the franchisor grants permission to one franchisee who can hold and administer more than one unit, traditionally in the same common region and also the franchisee has to develop a number of units to set up predetermined.

Area development franchise agreement :

This type of area development franchise agreement specifies the number of units that the Multi-Unit Franchisee will open, the duration of the operation, and the location

Master franchise agreement :

A franchise system sells a sub-franchise (which is also known as a “Master franchise”) with the motive of expansion of the business in other locations. It is also considered as the best way to expand the brand internationally. To have this, a master franchise is normally sold to a person or an entity to further sell the franchises in his own country on the franchisor’s behalf.

It is a method of the franchisor-franchisee relationship in which the master franchisee actually converts into a mini-franchisor for a defined territory. Within that territory, the master franchisee employs, trains, and renders ongoing care to each franchise they engage.

As per stated in franchise law, for different types of business opportunities, a corresponding type of agreement is designed. To know more details check Business Opportunities in Chennai, Franchise Consultants in Pune

 

 

 

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