Franchise Guide
Franchise contracts
What normally appears in franchising contracts (beware
of variations that can occur because of the laws in certain countries)
Clauses essential for the contract-
What is the brand or name concerned?
- Details of the brand’s registration.
- Definition of the know-how transmitted to the
franchisee.
-
Specific details of the transmission of the know-how,
the training and the manuals handed over to the franchisee.
- Details of any territorial exclusivities.
Application of the contract
-
Undertakings by each party, before, during and after the contract.
- Specific details of the standards to be observed.
- Details of any exclusivity in obtaining supplies or
in referencing.
-
Any restrictions in terms of pricing policy.
- Intuitu personae clause and acceptance of the
successor (the contract is concluded based on the franchisee’s personality and
cannot usually be transferred to any purchaser without the
franchisor’s consent)
- Confirmation of the parties’ independence.
- Confidentiality, non-competition and non-affiliation
clauses and renunciation of the exercise of other activities, etc.
Financial components
- Entry fee
- Royalties
- Other fees or payments
-
Contributions and minimum amounts for the advertising
budget.
Publicity and brand image
- What publicity regarding the opening and then in ongoing operation.
- At national and/or local level.
End of the contract
-
Contract duration.
- Conditions for ending the contract before term.
- Renewal conditions
-
Post-contractual non-competition clause.
- Right of pre-emption.
- Conditions for transferring the
business
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