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Understanding the franchise documents

Key aspects of the franchise agreement

The franchise document is a legally binding agreement that specifies the different terms and conditions that the franchisor has for the franchise owner. In other words, it defines the relationship between the 2 parties. It also outlines the obligations that the franchisor has towards the franchise owner.

The following are the key aspects of any franchise agreement:

Trademarks
The rights to use a popular trademark id a key benefit of purchasing a franchise. The agreement will clearly define how the trademark and logos can be used. Things to consider here is how popular the trade mark is, how long it has been in operation and what the restrictions on its use are.

Franchise Location
This aspect of the agreement will define the area of operation for your franchise. It is important to check if you will have exclusive rights in that area or if there will be other franchise owners present.

Franchise Term
This will define the duration for which the franchise rights have been purchased. It is necessary to check if the franchise can be renewed by you and if the franchisor can purchase the franchise before the term expires.

Fees and Payments
The franchise fees will be clearly stated including what the initial fee and ongoing fees (including royalties) amount to and what the franchise owner gets in exchange for those fees.

Franchise Owner’s Obligations
The franchise owner’s responsibilities will be defined in this section. Common aspects include the requirements for training, participation in the business and how records must be kept and shared.

Product/Service Restrictions
This section will outline the restrictions placed on selling the product/service including quality standards, supplies that can used, advertising collateral, business hours, pricing, etc.

Renewal, Termination and Transfer
As the name suggests this will cover the renewal process for the franchise, the rights and obligations of both parties in case of termination of the franchise and details about how the franchise can be transferred.

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Valenta is a technology and business consulting franchise, helping mid-size organizations increase profitability via Process Optimization, Digital Transformation, Digital Workforce and Learning.

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Disclaimer

This information is not intended as an offer to sell or the solicitation of an offer to buy a franchise. It is for information purposes only. The offering is by prospectus only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington and Wisconsin. If you are a resident of or want to locate a franchise in one of these states, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state.

New York State Disclaimer : This advertisement is not an offering. An offering can only be made by prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. CALIFORNIA DISCLAIMER: THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING

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