Franchise Outlet Site Selection and the Franchise Agreement
Legal Article GuideBy: Lance Winslow
We have all heard the phrase; location, location, location. But did you know that even a mobile franchised business must consider the location where the actual business will be located, even if no customers ever go there. The franchised outlet site selection process must be clearly defined in the franchise agreements.
It is for this reason that in our franchise company we put in an additional clause in our franchise contract to deal with site selection. And although we were a mobile franchise operation, it still became necessary to address the issue. Below is the clause that I put into our franchise agreements;
4.1.2 Site Selection
The Franchised Business may be operated at such location within the Marketing Area as may be approved in advance by Franchisor in writing. Final site selection will be subject to the approval of Franchisor, which approval will not be reasonable withheld. To obtain approval, Franchisee must give Franchisor written notice of the proposed location, as well as photographs of inside and outside the premises of the proposed Location. If Franchisor does not give Franchisee written notice of disapproval within twenty (20) business days after receipt of the written notice of the proposed Location, then the proposed Location will be deemed to be approved by the Franchisor. Franchisee specifically acknowledges that site approval by Franchisor is not to be interpreted as a guarantee of success or profitability of the Franchised Business, which is to be operated at the Location.
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Obviously if your franchised business is a retail outlet then the franchise agreement we all have a larger site selection clause. You would be well advised to discuss this with a knowledgeable and experienced franchise attorney. I hope you will consider this in 2006.
Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/
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