Many of us may refer to a store with multiple locations as part of a “chain” or franchise without really understanding the structure of these kinds of businesses. What is a business franchise? How are they formed, and how do they operate? The following article considers some of the aspects of franchises that make them distinct from other kinds of businesses. Who Owns the Franchise?A business may have multiple locations without being a franchise. If the locations all have the same owner, then the business does not meet the definition of a franchise. A business franchise is defined by the structure of its ownership. Franchising occurs when the owner of a business grants a license to one or more parties for the purpose of conducting business using the same trademarks, trade names, trade dress, and other identifying aspects of the business. The party granting the license is referred to as the “franchisor,” while those purchasing licenses are referred to as the “franchisee.” The franchisor is frequently involved in specifying the products and services offered by the franchisees. They may also provide a system of operation, marketing tools, raw materials, training, and other forms of support. Different Types of FranchisesThere are two basic kinds of franchise relationships:
Individual states may have different business franchise definitions. Some states require a marketing plan or “community of interest” provision in their definition. The Federal Trade Commission (FTC) has its own business franchise definition that will generally apply when:
Certainly, every franchise involves a license, though not all licenses are franchises. Whether a business meets the federal or local business franchise definition may affect the kinds of disclosures that are required. However, these definitions do not greatly impact your rights when a disagreement arises since, in either case, a contract is involved. Contracts for a FranchiseFranchises are built out of contracts between the franchisor and franchisees. As such, there are two places a franchisee can look to determine their rights and responsibilities within the relationship: the language of the contract itself and the relevant jurisdiction’s contracts laws. The franchise agreement creates many of the most important rights and obligations between the franchisor and franchisee, including the degree of control the franchisor may exercise over the franchisee, terms of operation, training requirements, trademark and copyright obligations, renewal and termination options, and other important details. The jurisdiction’s laws indicate how contracts are interpreted and enforced when the parties have a disagreement. Free Consultation with a Franchise LawyerIf you are here, you probably have a franchise issue you need help with, call Ascent Law for your free franchise law consultation (801) 676-5506. We want to help you.
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What is Consideration for a Contract? via Divorce Lawyer Midvale Utah https://divorcelawyermidvaleutah.tumblr.com/post/180548186421
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