Franchise agreements should be regarded as live documents, deserving review and appropriate changes as the system matures and as lessons are learned. However, revisiting base obligations and critical fee structures usually only happens when the current form of agreement is introduced to replace the old relationship document on renewal or transfer of an existing agreement. In rare cases, agreed changes might be negotiated as part of an exchange of value between the franchisor and its sub-licensees.
The operations manual is a much more flexible document and will incorporate regular changes associated with the system. It is however concerned with operational matters, not the basic contractual arrangement between the parties and most would see it as a document guiding the delivery of business activities by the franchisee and not as a means of reviewing the fundamentals of the contract or the basis for establishing profit calculations for the parties. The underpinning contract (the franchise agreement) is viewed as definitive of the key rights of the parties during its (usually long) term, commonly with an expectation on the part of the franchisee that even a new and revised version signed on a renewal will not change the underlying relationship.
Common Mechanisms For Change… read on.
