The world of franchising can be confusing, with complex legal terms and structures. This article aims to simplify the contractual aspects of franchising, the balance of rights and duties, and the role of collaboration in achieving success.
The franchisor's rights
Franchisors have certain rights that must be respected when applying franchise agreements.
As far as financial rights are concerned, the franchisor takes risks for his franchise. He expects a return on his investment. Financial rights are included in franchise contracts. They remunerate the franchisor for his work.
In terms of exclusivity and protection, a franchisor can have exclusive rights over store design. He can create logos and refine visuals. He can also establish exclusion clauses to maintain product homogeneity.
On the non-competition clause, after the end of a franchise contract, the franchisor can establish a non-competition clause. This prevents franchisees from engaging in similar activities.
Franchisee responsibilities
For the presentation of the pre-contractual information document (DIP), the franchisee must present the DIP before signing a franchise agreement. The PID contains details of the contract. It includes administrative concepts, essential and optional clauses.
Respect for distinctive signs and know-how: Franchise agreements require franchisees to maintain and respect the franchisor's distinctive signs (trademarks, logos) and know-how, which must be respected and applied.
Franchisees must work closely with their franchisor. The franchisor provides technical, sales and marketing support. The franchisor also provides IT and legal support. Franchisees are also required to take part in ongoing training courses. These are managed by a network coordinator. They must also attend inter-franchise meetings. This enables them to improve their concept and share experiences.
Effective franchise collaboration requires an understanding of the rights and responsibilities of all parties involved. The franchisor must preserve its concept, while the franchisee must adhere to operational methods and work closely with the franchisor. By respecting these rights and duties, both parties can ensure the success of their partnership and contribute to the growth of the franchise.
