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Negotiations of Franchise Business Agreements

The majority of American franchise business agreement terms are non-negotiable. However, there are some clauses and terms which the franchisee can easily negotiate, which makes things more lucrative for the franchise business owner. Before starting your negotiation, you have to know which part of the terms are negotiable and to what extent you can negotiate. Once your accountant and attorney read the entire franchise business agreement or franchise business contract, they will give the areas where you can negotiate and the possibility of the depth of negotiation. Before starting a dialogue with franchisor you must have all the disclosures (FDD/UFOC) and a copy of the contract model and other related documents plus your professional expert’s opinion.

The most common places where the franchisee can negotiate:

  • Royalty and fees
  • Duration of contracts
  • Territorial and locations rights
  • Location approvals
  • Options to buy real estate
  • Adoptions of new technology
  • Remodeling and upgrades
  • Flexibility of introduction of new franchise products
  • Addition of some non-franchiser products and services
  • Intra-family transfers
  • Renewal clauses
  • Number of hours of business operations
  • Types of offered products and services
  • Maintenance and repair agreements
  • Purchase of other businesses

Besides these, there are other areas where you can negotiate before signing a franchise agreement. However, all those areas will vary from franchisor to franchisor and also from geographical location to geographical location. Check what works for you and follow your hired professional consultant’s advice.

If you want to know more about franchise negotiations, have further questions on franchise negotiations, or need assistance to negotiate with a franchisor, please contact us at help@bizworldusa.com or 415-234-8833 and one of our approved franchise business consultants will contact you.