The bfa provides its members with a self-regulatory framework and applies strict membership criteria regarding business practices, business procedures, contractual terms of franchise and support for franchisees. Depending on the nature of the franchisee`s duties, there may be a risk that the franchisee will act as the franchisor`s commercial agent. 15.1 What are the advertising obligations for the renewal of an existing franchise at the end of the franchise term? 9.1 Are there any mandatory local laws that could end the termination rights that would normally be expected in a franchise agreement? Associate Members – These are members who have proven that they have been operating at least one franchise for 12 months and are in the process of creating their network. There will be a training and support program and a small number of franchisees will have invested in the business. Although the business model is robust, it will only have been tested in a short period of time. This does not mean that franchise agreements are a fair balance between rights and obligations between equal trading partners. Franchisors are responsible for the network as a whole – and sometimes this can mean acting against the interests of a single franchisee for the good of the network. There is no mandatory disclosure requirement at the beginning of the franchise relationship or at all times. 1.3 When a franchisor proposes to appoint only one franchisee/licensee in your country, will that person be treated as a “franchisee” for the purposes of disclosing or registering franchise laws? Franchising can have substantial advantages over other types of marketing agreements, especially when a company wants to maximize brand value with external resources, while maintaining a considerable level of control.
However, in order to achieve these objectives, it is essential for a potential franchisor to carefully consider the structure and terms of its franchise agreements from the outset. The structure of the agreements must be considered in relation to the tax council (with regard to the United Kingdom and other legal systems in which the franchise will be active), the accounting board with a view to formulating a financial model that works for all parties and the legal advice in relation to the contractual documentation itself. A poorly planned franchise can have serious consequences for a business. The franchise agreement may include an absolute prohibition of the franchisee`s ability to transfer the franchise to a third party. However, it is more common for the franchise agreement to include an explicit transfer clause that establishes a procedure in which the franchisee can transfer the franchise subject to the franchisee`s prior written consent (which may be conditional in certain circumstances).