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Before a franchisee signs a contract, the U.S. Federal Trade Commission regulates the disclosure of information under the control of the franchise rule. [1] The franchise rule requires that a Disclosure Document (FDD) franchise be made available to a franchisee (originally a uniform offer circular (UFOC) franchise prior to the signing of a franchise agreement, at least fourteen days before signing a franchise agreement. [2] As a franchisor, you lend your brand to your franchisee. This is a great risk if you do not protect yourself properly and your brand. That`s why it`s important to set rules on the shape and sound of your brand, when you should use protected intellectual property, what advertising can be done and what the franchisee needs to know about using your brand. The franchise agreement describes the costs of franchised ownership. All deductibles charge a fee. These include upfront franchise fees, as well as current fees such as monthly licensing fees, advertising or marketing fees, and other taxes. The FTC rule provides that franchisors make available to potential franchisees a pre-sale document for the publication of franchises (FDD) to provide potential franchisees with the information necessary to purchase a franchise. Considerations include risks and rewards, as well as comparison of the franchise with other investments. Luck: Franchisors and franchisees should try to reach an agreement that is fair to both parties, although certain elements, such as pricing structures, may not be involved. As a franchisor, your franchise agreement is the most important and important legal document that governs and defines the relationship with your franchisees.

As part of your franchise agreement, you grant your franchisees the right to create and develop their franchise sites and, in return, franchisees agree to create and maintain their franchises in accordance with the mandates of your system and to pay you certain ongoing fees. Many franchisees are first-time entrepreneurs. One of the advantages of opening a franchise is the training, support and wisdom provided by the franchisor. The franchise agreement should determine the support and training that the franchisor will provide. The franchisor may also require the franchisee to attend external training and seminars. The franchise agreement determines the relationship between the franchisee and the franchisor. They should outline some aspects of this relationship so that both parties know what to expect. This includes: In addition to the FTC franchise rule, some states have written their own rules that must be followed when you open a franchise in that state. You should familiarize yourself with the laws of the state, both for your state of work, and for any other state in which you plan to extend your deductible.

The franchise agreement is long, detailed and is made available to potential franchisees as exposure to the FDD well in advance of signing, to ensure that they have time to review the agreement and get advice from their lawyers and other advisors. While there is no model for franchise agreements or laws that indicate what should be in a franchise agreement, each franchise is different. Finally, there are strict rules, which makes a franchise a franchise.