Possible pitfalls of a starting franchisee
Starting a business on the basis of “franchising” is in. This is not surprising, after all, as a starting entrepreneur, it certainly has a number of advantages to operate a company under a proven franchise concept. Below are seven points that, in my opinion, the aspiring franchisee should in any case take into account before working with a franchisor.
1. Is there a proven franchise concept? In other words, has the formula indeed proven itself in practice? If there is only a starting concept of a few months old, with a limited number of franchisees participating, the starting franchisee should be wary. In situations like this, I usually advise aspiring franchisees to have some solid conversations with potential fellow franchisees. This can be very enlightening.
2. Has proper – independent – market research been carried out from which it follows that the operation of the company is financially viable in the future? This is a very important point. If the franchisor, when asked, is not prepared to have such an investigation carried out at its expense, a healthy dose of suspicion is in order. In fact, in my view, a franchisee should not start without such an investigation. After all, the franchisee must have (some) insight into the expected results. In addition, the franchisee can hold the franchisor to account – if the results during the course of the journey are disappointing – the franchisor about the results of the market research.
3. It is also important that the franchise agreement includes the obligations of both the franchisor and the franchisee. There must be a balanced franchise agreement. Is the franchisor willing to take any suggestions from the franchisee into account, or is it “take it or leave it”? In short, the franchisee must be prevented from entering into a strangling contract, which only includes obligations for the franchisee.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Pronunciation not necessarily bad for C1000
Pronunciation not necessarily bad for C1000
No inspection of Association C1000 in documents C1000 acquisition.
The Court in preliminary relief proceedings has ruled on the question whether the C1000 franchisees have the right to know what agreements have been made about their fate.
What to do with your local competition
Of course, it is always annoying for the operator of a snack bar, for example, when a competitor joins.
Supermarket letter – 6
No inspection of Association C1000 in documents C1000 acquisition
mr. Th.R. Ludwig teaches a master class franchise course for NFV on September 16, 2014
On September 16, Mr. Ludwig discuss various legal aspects involved in franchise relationships during a course organized by the NFV.
Formido franchisee stumbles over burden of proof in prognosis case
Formido franchisee stumbles over burden of proof in prognosis case