Information on Franchises
Top Food Franchises Today: Denny's: Free Grand Slam
The Grand Slam isn't new to the Denny's menu--it's been around since 1977--but add the word free and you have a revitalized brand. When Denny's announced a giveaway of the pancakes, eggs and bacon meal in a 2009 Super Bowl commercial, nearly 2 million people lined up to get one.
What is the Franchise Agreement?
The franchise agreement outlines the way your business will work within your franchise system. It gives both you, the franchisee, and your franchisor a clear understanding of the terms of your business relationship.
The franchise agreement also serves to ensure uniformity, which is beneficial not only to the franchisor but to the franchisee as well. If, for example, a customer has an unsatisfactory experience at another unit within your franchise, he will be unlikely to want to do business with your unit. Therefore, the franchisee is under obligation to maintain uniformity, and the franchise agreement will establish parameters for that uniformity.
These parameters include what products you'll use or sell at your franchise and the quality of services that must be provided by your employees.
The franchise agreement also details what actions will be taken should you breach these parameters. It explains, for example, what notices the company must give you and how much time you have to respond once notice is given.
What Should be Included in a Franchise Agreement?
First and foremost the franchise agreement should state that you are part of the franchise and that you have a fixed fee (your franchise fee) to pay in compensation for this privilege.
The franchisor has the right to approve or disapprove of sites for your location, but at the same time they will be obligated to assist you in the selection of a site for your business.
There will be a section in the agreement that goes over the use of the franchise name. Specifically, you may not challenge the franchisor's right to use the name and will be required to inform the franchisor if you discover someone else using the name without permission.
The franchise agreement also indicates how you will be expected to maintain the aforementioned uniformity and they alos have to provise the complete Inormation on franchise.
Other Provisions You May See
The agreement will state the manner in which you must display signage at your locations. There may be certain requirements and/or restrictions on the use of a sign with the franchise name.
Often a section is included detailing what training and assistance will be provided by the franchisor. This section would go over the franchisor's responsibility to help a new franchisee get his unit going.
A franchise agreement may contain a section on advertising. Some companies use a national advertising fund to which you will have to contribute but will also benefit from during a national ad campaign. Additionally, many franchisors want to retain the right to review any and all advertising/promotional materials you may use to ensure-you guessed it-uniformity.
A section about the operating manual will require that you abide by it and adopt any revisions made to it by the franchisor. You will be under a confidentiality agreement concerning the operating manual-which remains the property of the franchisor-because the manual will divulge everything about the franchise's business plan.
It's in the best interest of the franchisor that his franchisees operate out of clean, well-maintained buildings, so there may be a section of the franchise agreement pertaining to maintenance and repairs.