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Franchise ownership is becoming more popular. Between trying to escape the grind of a 9 to 5 job and retirees investing their money, more people than ever before are looking at the possibility of franchise ownership. However, before making the investment, there are a few important things to know and understand about franchise contracts.

These contracts are put into place to oversee the legal relationship that exists between the franchise owner and the company. It includes provisions that address issues if the relationship doesn’t work out and stipulates how the relationship will proceed if it does work out.

Non-Negotiable Agreements

The stronger the franchise, the less negotiable the terms. This is because strong franchises have a system that works since they have already put the work in to develop a successful system. In most cases, the franchisees are happy with the agreement, as it works as a system that is more likely to yield profits.

However, it is important to know these agreements are often not negotiable and come as a form contract. In this situation, if there are questions or concerns about the agreement, it serves to request a letter of clarification that addresses the issue. In many cases, this will create a better level of comfort without having to formally change anything in the agreement and sets a good tone for the relationship.

Negotiability Could be a Red Flag

While being able to negotiate everything in a contract is typically a good sign, it could be a bad sign in a franchise company. If they are willing to negotiate every part of the contract, this could be a sign they are unsure of their franchise model or don’t have high confidence in it. This means the value of being a franchisee is also negotiable and could indicate less validity in a brand and operating system.

Terms Include How the Franchise Will Operate

Many are surprised to see a list of things they must do in order to stay part of the franchise but it’s very standard in these agreements. The rules laid out are created to help the new franchisee understand how the business should operate and give guidelines for success. If you are uncomfortable with these rules, it could benefit to talk to another franchise and see how they operate. If you are still unconvinced, it may be prudent to select another franchise.

When opening any business, it’s important to have the right signage. As part of a franchise, there are specifications for how to stay part of the company, including franchise signs. Contact us today to get support from a local sign company in getting the right signs for your new franchise.