By Fredrick P. Niemann, Esq. a New Jersey franchise lawyer
In New Jersey and throughout all 50 states, the franchise agreement is the cornerstone document of the franchise relationship. It is this document that is legally binding on both parties, laying out the rights and obligations of each party. You will always find attached to the FTC disclosure statement a sample franchise agreement or presented separately. Either way, under Federal law, you are entitled to receive it as a prospective franchisee five business days before signature. You should have it reviewed by a lawyer familiar with New Jersey franchise matters–especially since most agreements are extremely one-sided in favor of the franchiser. No one should enter into a franchise and expect to have a fairly written contract.
The agreement will contain provisions covering, in considerable detail, the obligations of the franchiser (the company) and franchisee (you) regarding operating the business; the training and operational support the franchiser will provide (and at what cost); your territory and any exclusivity; the initial duration of the franchise and any renewal rights; how much you must invest; how you must deal with things such as trademarks, patents and signs; what royalties and service fees you will pay; tax issues; what happens if you should want to sell or transfer the franchise; advertising policies; franchisee termination issues; settlement of disputes; by the company, operating practices, cancellation, and attorney fees.
There is no standard form of franchise agreement because the terms, conditions, and the methods of operations of various franchises vary widely depending on the type of business involved. For example, franchises for printing, employment agencies, and automotive products will differ from the franchises for fast food service, convenience stores, or clothing.
Contact me personally today to discuss your franchise matter. I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns. You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com/.