You may be led to believe that your franchise agreement is a standard agreement and that a franchisor is legally not allowed to make any changes. But you may be unfortunately mistaken. Continue reading to learn whether your franchise agreement can be modified and how one of the experienced franchise law attorneys at FortmanSpann, LLC can work on your behalf in conducting necessary negotiations.
Is a franchisor allowed to modify an agreement?
Put simply, it is legal for a franchisor to modify their franchise agreement as they see fit. However, some terms and conditions usually cannot be subject to change, and examples are as follows:
- The financial resources that you will be supplied with.
- The royalty rate that you will earn with your franchise.
- The methods of operation for you to follow with your franchise.
- The use of proprietary products within your franchise.
A franchisor may attempt to sway you into signing the agreement, alluding to the fact that it would be a waste of time and money otherwise, as changes will never be made. While this is a false allusion, it is also important that you keep in mind that you can legally negotiate certain aspects of your franchise agreement before making this total commitment. So, you must speak with one of the skilled franchise law attorneys before signing anything as serious as a franchise agreement.
What terms in my franchise agreement can be modified?
There are certain terms that you should look out for when reviewing your franchise agreement. This is because your franchisor may have the right to modify them down the line. Or, in the instance that you do not necessarily agree with them, you may have the right to negotiate them. Such terms may include, but may not be limited to, the following:
- The scope of your franchise’s protected territory.
- The grace period you will be given for the commencement of your royalty obligations.
- The renewal rights you will be given for your franchise.
- The transfer rights you will be given for your franchise.
- The potential rights of first refusal you will be given for your franchise.
- The cure period you will be given for alleged defaults.
- Your liquidated damages and your liability in the instance of early termination.
In the end, you should not buy into the false sense of security that your franchise agreement will indefinitely remain the same. And, your right to negotiate should be taken seriously and used to your fullest ability. So, you will benefit from having your contract reviewed by one of the seasoned franchise law attorneys. Whenever you are ready, pick up the phone and give our firm a call.