Q: What crucial items a franchise agreement should cover?
A: First and foremost a person must be properly taught and oriented on how to read the franchise agreement. It is not enough that a copy be given to the person who in turn merely signs it. The franchise agreement contains details on how the business relations between the franchisor and franchisee will be governed. The critical parts are:
1. The rightful owner of the franchise business; including the ownership of the trademark
2. The territorial coverage
3. Fees to be paid
4. Support to be provided by the franchisor
5. Obligations of the franchisee and franchisor
6. Post contract including non-compete clause
Armando "Butz" O. Bartolome is currently President of GMB Franchise Developers, the pioneer franchise development company in the country and is behind the growth and expansion of over 200 local companies. You may reach him at email@example.com.