A franchise is basically a business that has already been set up which is expanded through selling off the rights to use the business brand name and structure out to different people and areas. A franchise agreement will involve the franchisor, who will sell a franchise license to an investor known as the franchisee.
The franchisee will be required to adhere to strict rules regarding how they can set up and run the franchise they have purchased, using the established business methods and branding, so this is not an independent business venture and the franchisor will provide ongoing support and guidance on issues such as marketing, products, services, accounting, recruitment and training.
Before signing a franchise agreement it is very important that the potential investor enlists the support and advice of an experience business attorney, in order to ensure that all of the details of the terms of the business relationship, the fees, royalties, restrictions, length of agreement etc, are listed clearly and are reasonable.
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