Negotiating a Franchise Agreement: How to Get the Best Deal
A franchise agreement is a legal document that outlines the terms and conditions of a franchisor-franchisee relationship. It includes details such as the fees and royalties that the franchisee will be required to pay, the obligations of both parties, and the length of the agreement.
Before entering into the agreement one should know that what are the things on which we can negotiate with the other parties. Some of these are:
- Initial fee: The initial fee is more likely to be reduced than the continuing royalty fee rate.
- Territory geography: You should negotiate for a larger territory or exclusive rights to a certain area.
- Renewal rights: The franchisee should negotiate for better renewal terms, such as a lower renewal fee or longer renewal period.
- Training and support: The franchisee should negotiate for additional training and support from the franchisor.
- Marketing and advertising: The franchisee should negotiate for better marketing and advertising support from the franchisor.
- Legal Advice: While seeking a legal advice a lawyer can negotiate by reviewing the agreement and also tells that on what ground the person can get the best deal.
This negotiation process in the franchise agreement arises when one party need to change or negotiate the terms and condition of the agreement and this can be done as these agreements are made under the provision of Indian Contract Act, 1872.
