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Franchisors: Exercise Your Contractual Rights

By Dana Trexler Smith
February 29, 2008

With the explosion of e-commerce and the easy availability of often free information on the Internet, franchisors have the ability like never before to expand their businesses into global markets.

As a result, a steadily growing number of franchisors are entering emerging markets such as China, Japan, Brazil and Russia. While the rapid growth into these markets has increased franchisors' revenues and brand awareness, it also has added a layer of complexity and risk in monitoring franchisee compliance with the terms of the franchise agreement. At a time when compliance is of paramount importance, it is critical that the franchisor enforces its rights under the franchise agreement and that the franchisee understands the contractual obligations to which it will be held accountable. Unfortunately, monitoring compliance with franchise agreements is too often overlooked, and franchisors run the risk of not capturing the revenue to which they are entitled, and of damaging the reputation of the franchise.

Typical Franchise Agreement Elements

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