Why should you become a franchisor?

What are the obligations of a franchisor?

The most important obligations of a franchisor are:

  • granting a licence incl. permission to use the system’s industrial property rights
  • duty to pass on all know-how concerning the franchise system
  • duty to provide on-going advice and information on running a business
  • help franchisees to become a part of the system before, during and after the opening of the business
  • protect franchisees against competition in order to maintain and strengthen the competitiveness of the system
  • supply franchise businesses with the products stated in the contract

The part of the contract which describes the obligations of a franchisor generally also gives a detailed list of the individual components of the service package as well as all additional services subject to a charge. The systems manual which must be supplied by the franchisor is of particular importance. The statements made by the franchisor in the advertising documents and explanations should be compared to the legal stipulations written in the contract.

It is the duty of franchisors to support their franchisees and help them to run their business by providing suitable measures as well as training measures. Furthermore, franchisors are responsible for continuously further developing their system.

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