PandaTip: Once the model is complete, you and the franchise owner can sign the final franchise contract from any computer, smartphone or tablet. PandaDoc`s electronic signatures are legal and legally binding. Your system and written contract determine whether you are a licensee or a franchisor. Even if you enter into licensing agreements with licensees and do not consider yourself a franchisor, the Australian Competition and Consumer Commission (ACCC) can effectively qualify you as a franchisor. A franchise agreement can have many benefits for both the franchisor and the franchisee. – Huge reputational risk by allowing other companies to use their names: if a franchisee does not meet the franchisor`s quality standards (cleanliness, customer service, pricing, product quality, etc.), this can have a negative effect on the reputation not only of the franchisee, but also of the wider reputation of the franchisor. There is therefore a risk that others who are not directly related to the company may use the company name and brand. In the event of non-compliance with all the terms of this agreement concluded by the franchisee, the agreement is terminated in its entirety. As it stands, there are no legal or personal ways to prohibit them from executing this contract term. The company will provide the necessary assistance, as shown below for the owners, as agreed in this franchise agreement.
For example, you can own a fashion brand and choose to add a series of sunglasses. After examining the cost of making sunglasses yourself, you realize that it is easier or cheaper to relocate and enter into an agreement with a manufacturer. The manufacturer then designs and produces sunglasses with your brand. In this example, a licensing agreement would allow the manufacturer to use your brand. Legal documents: Franchise agreements contain many legal documents that must be understood and completed. All conditions deemed unenforceable have the option of being replaced if necessary.