Master franchise negotiations

The below points will cover negotiating the master franchise deal and will outline what you need to know and do.

• Do not sign any master franchise contract or make any payment until you have fully done your homework.
• Manage the legal process - obtain estimates - control-drafting process - ensure no power shifting.
• Have a franchise lawyer review the disclosure documents and master franchise agreement; choose an experienced lawyer, well versed in licensing agreements.
• Ensure the master franchise agreement clearly sets out the extent of rights to be granted and the territory of exclusivity and the term and renewal issues.
• Ensure the sub-franchise agreement is user-friendly in the target territory and suitably adapted to reflect impinging law.
• Have a franchise accountant view the company's financial disclosures.
• Examine the products, systems, management, purchasing power and marketing on 1 or more visits to the company.
• Take a long-term view - normally it takes more time, effort and money than envisaged.
• Accept that franchisors can rightly seek to make a charge for the granting of rights.
• Ensure performance schedule for development is realistic.
• Insist the best people are available to support the master franchisee.
• Accept the need to invest before expecting to see a return for the new business.