Balancing The Imbalance In A Franchise Relationship

Financial Post:

It is no secret there is an inherent imbalance of power in the franchise relationship between franchisors and franchisees. It is the reason franchise law exists in the first place — to address that exact issue and codify certain rights for franchisees and obligations for franchisors.

However, the fact that franchisors hold considerably more negotiating power doesn’t have to be a bad thing. As I’ve expressed here before, franchising is all about consistency, and consistency can only come about when everybody adheres to the same standards. To that end, a franchise agreement is largely a list for franchisees of what they must do, what they’re not allowed to do and what the consequences are when they do or don’t do one of those required things. Read on.

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