Basic Rights And Obligations Are Delineated In A Franchise Agreement
These problems typically arise in the context of an involuntary transfer or termination of the franchise (as opposed to an authorized franchise transfer requested by the franchisee with which the licensed assignee will continue the transaction). This type of agreement, which encourages the franchisee to take steps such as “the lawyer in fact,” is usually enforced. The consequences of termination will generally result in the franchisee taking steps to ensure that they will no longer be in a relationship with the franchisee. The franchisee no longer benefits from the use of the trademark/trade name and other proprietary rights belonging to the franchisee. In addition, the franchisee is required, for a given period, within an area covering its business premises or territory, not to compete with the franchisee, nor to use the franchisee`s system or other methods. A currently effective franchise agreement must be kept in electronic or printed form for the duration of the contract. Upon expiration, internal revenue service best practices and policies recommend a retention period of 10 years. Franchisors must also keep a copy of each materially different version of their FDD as well as a copy of the signed receipt, both for at least three years after the end of the fiscal year in which the documents were last used. . .