When businesses begin to be successful and achieve to position themselves within the market, they usually seek to expand. This way, their reach becomes broader and their profits increase. One way to do this is by franchising the business. If this is your case, you probably need a franchise agreement. What is it and how does it work? We will introduce you to that in this entry.
One of the main services we offer is corporate service. We advise you throughout the planning and elaboration of any document your business needs. You can learn more about it here.
Franchise agreements are documents that are signed by all parties involved in it, consenting the use of the services and resources of a currently functioning business model that has been successful in its area. This is actually a point in the businessman’s or entrepreneur’s favor, as he or she can be sure their business has achieved the expected results, and the prospects of failure are minimal.
This process includes two parties: the franchisor, a natural or legal person holding the rights over the franchise, and the franchisee, who will benefit from said rights and make a profit from them.
What does the agreement need to contain?
● Object of franchise: It is the transmission of the unit that the franchisee uses.
● Use of the trademark and exclusivity: It regulates the use of the logotype and the trademark, its protection and the geographical zone in which it will enjoy exclusivity.
● Transmission of know-how: The necessary knowledge is granted for the business to function adequately.
● Contract obligations.
● Duration of the contract: The term of the contract is established, as well as the conditions for its renewal.
Advantages of franchise agreements:
● Gives you access to the know-how of businesses that have been successfully franchised.
● It represents a lower risk to the franchisee, as the business is already active and functional.
● You obtain the proper training to run the new franchise.
● It eases the administration of the rights and liabilities of both parties.
At QuAdrans Law and Finance, we provide you with advice to consolidate your franchise agreement. Start your business in the best way possible.
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