Key Points to Consider Before Signing for a Franchise
A franchise business model is an attractive option for long-term investment. Before you enter a serious game of franchising, a set of rules, terms and conditions are being laid down which need to be strictly followed by Franchisor & Franchisee.
Here are some important things to keep in mind before singing for a Franchise:
Branding Rights & Intellectual Property Rights
While entering a contract with a Franchisor, you are granted permission to use the brand, copyright, trademark & other brand-related peripherals for promoting your franchise.
Make sure that this clause is clearly mentioned in the contract, and is agreed upon by both Franchisor & Franchisee.
Staff Training & Equipment Handling
To make sure that the quality of service provided at all the outlets is coherent and uncompromised at all the outlets, staff training is a must.
Make sure this clause is being put in your Franchise Agreement and the Franchisor had agreed to provide training to the staff you hire.
Royalty over sales
Many franchisors use various revenue sharing model. You may be asked to share some percentage or Royalty.
Make sure the terms and conditions related to royalty, percentage sharing are clearly laid down in the agreement.
Terms & Conditions
Make sure that the terms and conditions related to Franchisee are being laid down clearly. You may take few days to go through every line carefully before signing the final agreement with the Franchisor.
Marketing Expenses
For more footfall & sales, brands & Franchisors conduct marketing and BTL activities to attract more customers. The budget is generally spent by the Franchisor.
Make sure the terms related to marketing are mentioned clearly in the agreement.
So we have covered almost every aspect to be considered before signing a franchise agreement. Want to add something more to it? Drop a comment below!