Thinking Before Signing a Franchise Agreement


A franchise agreement is a legally binding contract that defines the relationship between the franchise and the franchiser. Because the Agreement is drawn up by the franchiser, the terms and conditions generally favor the franchiser. You don’t necessarily have to agree to everything on the first go-round. Maybe you can negotiate a better deal. Before signing the franchise agreement, be sure consult an attorney. Here are some tips you must consider before signing the agreement:

  1. Are your legal responsibilities as a franchisee clear? Are your family members similarly obligated?
  2. Who is responsible for selecting the location of your business?
  3. Is the name or trademark of your franchise legally protected? Can the franchiser change or modify the trademark without consulting you?
  4. Has the franchiser made any oral promises that are not reflected in the written franchise agreement?
  5. What are your renewal rights? What conditions must you meet to renew your agreement?
  6. Do you have exclusive rights to a given territory or could the franchiser sell to additional franchisees who would become your competitors?
  7. Under what terms are you allowed or required to terminate the franchise agreement? What becomes of the lease and assets if the agreement is terminated? Are you barred from opening a similar business?
  8. Under what terms and conditions are you permitted or required to sell some or all of your interests in the franchise?
  9. Are you required to buy supplies from the franchiser or other specified suppliers? Under what circumstances can you choose your own suppliers?
  10. Has your attorney studied the written franchise agreement? Does it conform to the requirements of Government rules?

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Selecting your Foreign Agent


  1. Your agent should be a national of the country where you aim to do business and should have experience in your industry or product line.
  2. The agent should not be involved with a competing company or product, but could be representing a complimentary line.
  3. Do your own checking of references. Have your banker check your agent’s bank references.
  4. Where credit is an issue, get a credit report from a local credit agency.
  5. Check at least five or six of the agent’s references: clients, customers or other business contacts relevant to your business.
  6. Visit your prospective agent in the foreign country and ask to come along on customer calls. Watch carefully how clients, secretaries, and purchasing agents respond to the agent.
  7. Since the personal relationship is so important in business abroad, the contact person must be someone who can negotiate for your company and who has authority to sign a contract on the spot.
  8. Make sure responsibilities are clear. The agent is typically responsible for promoting your interests and products, but it is no standard procedure as to who pays for what. For example, the agent can design local advertising campaign and pay for it, or bill you, or, conversely, you must provide advertising.
  9. If possible, make the written contract with your agent short-term and nonexclusive so that you have a safety valve. However, it is essential for you to treat it as an exclusive arrangement and to establish a strong mutual long-term commitment. Many agents will not consider a contract that is not exclusive or that does not continue for several years.
  10. Consult a local attorney before making any commitment to a national. It is difficult to get out of an agent agreement, so terms of termination and other “outs” should be established in the beginning. Agency laws in foreign countries are changing rapidly and legal problems arising from small mistakes can put you out of the market permanently

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Law in Business


A person who is involved in business is also involved in the law concerning business. Making contracts and using negotiable instruments—both of which are legal concepts—are the essence of business. Business and law were closely associated even when there were few lawyers and business managers spent relatively little time with them. The growing importance of law in business, however, is shown by the rapid increase in the use of lawyers by people in business. In recent years, the number of corporate counsel, the full-time lawyers who are employed by corporations; has been growing faster than the number in any other category of attorneys. Law firms that serve primarily business people have also been expanding at a great rate. Even the smallest businesses turn to lawyers frequently.

In the past quarter century there has been a qualitative as well as a quantitative change in the concern of business managers with law. In earlier times, business managers generally employed lawyers only in emergencies. A lawyer might be engaged if a summons to appear in court was received, if a businessperson could not collect a debt that was due, or if a supplier’s goods were defective and no settlement could be reached. Lawyers are still sought out when such things happen today. However, more and more, business managers employ lawyers to help them plan to avoid such emergencies and comply with a rapidly growing mass of legal rules imposed on business operations by government bodies. This use of lawyers by business people is called preventive law.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.