Franchise Agreement Ppt

5 2. The termination rights of the franchiseeThe good: only for the good cause and only after a targeted denunciation of supposed defects and a reasonable possibility of healing. The bad is just for the good cause, but without the possibility of healing. What`s ugly: If the franchisee is considered to be late with the franchise agreement, all franchise agreements of the franchise can be terminated. 6 3. Franchised Early Out RightsThe Good: Franchisees can terminate the contract at any time, for whatever reason, with a 30-day period. The worst part is that franchisees can terminate the franchise if it doesn`t work with a profit for a reasonable period of time – for example. B, six months in a row. Which is ugly: franchisees cannot terminate until the specified term expires and, if the franchisee does so, the franchisor claims a right to winding up damages or loss of future royalties and advertising royalties over the remaining term. 13 10.

Point 8 in the franchise disclosure documentThe voucher: Franchisor expressly agrees to make its best efforts to negotiate with suppliers for the benefit of franchisees, undertakes not to accept payments from a supplier for itself and agrees to transfer its franchisees in proportion to all available loan payments. The bad: Franchisor does not negotiate for the benefit of its franchisees and makes payments from suppliers on the basis of franchisee purchases, but commits to depositing all these payments into the national advertising fund, but with broad discretion as to how these payments are spent. The ugly: Franchisor does not negotiate for the benefit of its franchisees and takes payments from sellers on the basis of franchisees who purchase the necessary goods and services, but claims the right to use these payments for any purpose. 9 6. Restrictions at the discretion of the franchisorThe good: the franchisor and the franchisee agree explicitly, honestly, in good faith, non-discriminatory and commercially reasonable. The worst part is that the franchise agreement does not say whether the parties will act reasonably or some otherhow. What is ugly: the franchisor claims the explicit right to exercise his corporate judgment in a way that is useful to him in his “business judgment” or in his “sole discretion”. 7 4. Protection from equal or similar competition from brandsThe good: franchisees benefit from exclusive territory in which neither the franchisor nor a franchisor`s franchisee will exploit the same or similar concept. The bad news: franchisees enjoy limited protection against the same trademark competition, with the franchisor reserving extended rights to compete with similar brands and/or other channels. What is ugly is that the franchisor finds that there is no protection against the same competition of trademarks or other similar brands and explicitly claims the right to participate in such a competition. 8 5.

Franchisors` right to unilaterally change the terms of the Good franchise: the franchise agreement contains no explicit right to change it unilaterally and does not contain by reference to a document – para. B example, the operating manual – which can be changed unilaterally. The worst part is that the franchise agreement contains limited explicit rights to change it unilaterally – for example. B to make the necessary technological changes – but with explicit restrictions – for example. B, fees cannot be increased unilaterally. What is ugly: the franchise agreement explicitly contains rights not limited to unilateral modification and all documents that are included by reference.