A rose with any other name would smell so sweet, but that`s not always the case for franchises. Many types of agreements are called franchises without being, in fact, franchises. So this month, we`re looking at the range of agreements available, from a typical franchise agreement at one end of the scale to a single license to the other. For example, franchises of films such as Harry Potter and Star Wars are often referred to as franchises. But agreements that allow the Harry Potter logo to be put on a notebook or for Star Wars brand pajamas would look more like a license than a franchise agreement. Making the size and location of territories incorrect will be a costly mistake for franchisors. Once an area has been allocated, there is little room to change it. A franchisor may be obliged to buy back the territory at a considerable cost and/or pay compensation to the franchisee in an effort to reduce the territory. Most franchise networks operate on the basis of giving each franchisee its own exclusive territory. However, the text of the franchise agreement must always be reviewed, because it is only in different agreements that different things can be said. Almost all franchise agreements will have some exceptions to the rule.

In a typical franchise agreement, the franchise agreement is the cornerstone of the agreement, which is closely supported by the operating manual. The rights to use the name and brand are granted to the franchisee, but the franchisee also benefits from a comprehensive trading system. The operating manual contains detailed procedures for the day-to-day running of the business, from recruiting and training staff to advertise, creating new customer offerings, providing goods and services, billing and payment. The franchise agreement provides for the obligation of franchisees to operate in accordance with the procedures set out in the operating manual. In addition, the franchisee can count on a considerable level of initial and ongoing training and support from the franchisor. However, if the new point of sale is likely to affect the revenue or profitability of an existing franchise, the franchisor is also required to make arrangements to continue to fulfill its “current technical and commercial assistance obligation to its franchisee.”