Franchising your business can be an excellent way of bringing in additional revenue.  Let’s say you are a successful gym owner, and want to expand into a different city, but don’t have the time to run both gyms.  Allowing someone you trust to become a franchisee allows them to run their own business, with your name above the door.  Typically, you would specify what the business looks like, and how it is run, and provide backroom support, all in exchange for an agreed percentage of profits, or standard monthly fee. 

 

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• What rights to use your brand, logo, and intellectual property are granted to the franchisee

• The length of the agreement

• An initial fee for granting the franchise, and the basis of ongoing royalties

• Whether the franchisee will be expected to contribute to marketing costs

• The standards you will expect the franchisee to live up to

• What initial, and ongoing, training and support you will supply

• The area in which the franchisee can operate - after all, you may want to sell other franchises in the future, in different areas

• Clarity that all of the intellectual property, logos and designs belong to your company

• Confidentiality and non-compete clauses both during, and after, the term of the franchise

• The circumstances in which the franchise agreement can be terminated

• A mechanism for resolving any disputes without having to spend a fortune on lawyers

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