The franchisee usually makes available to the franchisee a competent disclosure document at least 14 days before the signing of the contract. The agreement should include a provision confirming that a franchisee may terminate a franchise agreement of indefinite duration only with a reasonable period of time vis-à-vis the franchisee, unless the franchisee has seriously breached the franchise agreement. The franchisee may be required to take out insurance under the agreement, including insurance against damage caused by fire and natural disasters, as well as liability insurance for damage suffered by customers at the franchise site. The deductible agreement could set the minimum amount of insurance required. This franchise agreement applies to a company that sells goods. Instead of a standard purchase agreement, a franchise agreement would be used if the franchisor wished to retain a certain level of control over the intellectual property (including the brand), the sales experience or the provision of after-sales service. This is an extremely comprehensive template that is suitable for a large number of businesses and can be created to meet your specific needs. The termination of a franchise agreement by the franchisee does not in itself constitute a transfer of business as a continuation activity, even if the franchisee then appoints another franchisee in the same area and serves the same customers as the previous franchisee. Therefore, the new franchisee is not required to assume the rights and obligations of the former franchisee vis-à-vis its employees, as required by section 197 of the Labour Relations Act on the transfer of a business as a continuation. Becoming a franchisee can be a bit daunting, especially if you don`t know how to understand the different franchise possibilities or evaluate the operation of a particular franchisor. Fortunately, Law 68 of 2008 on consumer protection (“the CPA”) intervened and supported potential franchisees by requiring franchisees to provide a disclosure document to potential franchisees. The FIO Board of Directors is composed of 4 to 8 people, including 2 appointed by FASA, 3 appointed by franchisees and 3 appointed by franchisees. The agreement should contain a provision preventing the franchisee from assigning, assigning or selling in any way its rights or sub-franchise without the written consent of the franchisee.
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