As an investor envisioning to invest your hard-earned money in a franchise, it’s important that you retain the control of the business you’ve had your eyes on for years. This means taking total control over the finances, management, and business operations. You’ll also want to be sure that whatever you’re getting into, will be of immense benefit to your business. This simply means being extra cautious of the contracts you sign.
You’ve spent a lot on advertising and searching for that profitable franchise and now that your efforts have borne fruit, it’s time to make it count by the way you’ll choreograph the contract because come to think about it, you don’t want any seal to be the reason you get ripped off or taken advantage of. By all means, carefully consider how you write your franchise contracts as it may make or break your efforts.
For this and more, here’s how to write a contract when buying a franchise business.
Now, while this might sound a bit demanding, especially when drafting a contract, you must stipulate your terms earlier on in the business contract. You could seek assistance for this from qualified attorneys just to ensure that nothing important is left out.
But before enlisting the help of an attorney, you can borrow inspiration from these Hello Bonsai contract templates just to have a clear-cut way of how you want the contract structure to look like. In your draft copy, ensure that you’ve included all the important aspects of the deal.
These may include:
- Ownership and licenses
- The payment structure and terms of payment
- Transfer of The franchise intellectual rights
- And an out clause just in case things don’t go your way
Buying a franchise is no small business. All the signatories must be present and all the terms are articulately laid out and understood. To avoid confusion down the line, have all the signatories sign the contract document using their full names.
But before this, you should have a list of the people you’ll want to be included in the contract. You just don’t want the most important signatory to be absent from the contract. Also, ensure that the signatories’ titles have been indicated on the contract.
While you’ll want the signatories to relinquish their obligations, you’ll want it stipulated in a disclosure agreement. This should be clear in the confidentiality agreement indicating that whatever that has been agreed on is legally binding. As earlier mentioned, buying a franchise is no small business and it’s for this reason that you’ll need it done before a qualified attorney.
Find business law firms that have extensive knowledge in business legal matters and with years of experience in the field to help you out. Financing such a big sale will also require a written statement from the franchisee seller who’s also the legal owner of all the affairs of the franchise. Have all these things included in your draft copy before presenting them to your attorney.
Ensure To Include the Terms of Sale
Depending on the size of the franchise, it could be that you want to pay in cash or in installments. Additionally, you’ll want to include details such as whether the payments will be done by cheque or through bank transfer.
You could also have a financier support your business development agendas by way of credit. All these need to be included in the terms of the payment section without leaving any details out.
This is an important section to include in your contract as it helps set out the dispute resolution mechanisms that will help to settle disputes in the event that such arise. When drafting the conflict resolution clause, be sure that it’s internally consistent and workable to all the parties involved.
This will help streamline the resolution process when that time comes. Fundamentally, the conflicts in your contract will be resolved in court, the reason to reiterate the importance of hiring an experienced attorney.
Among the factors you’ll need to consider when hiring a business lawyer include:
- Experience in contract writing and in contract resolution issues
- The size of their law firm
- Preparedness to take your case to trial
Before the final statements, you need to be congratulated for making such a huge effort in buying a franchise. From the above pointers, it’s critical that you draft the best contract to avoid any future conflicts with the signatories.