Franchising Agreements and Pricing Issues
Legal Article GuideBy: Lance Winslow
Have you ever noticed that a television ad for your favorite hamburger, at your favorite fast food restaurants had a disclaimer at the end of the commercial, which said; available only a participating dealers? And then you think to yourself is my local franchise outlet participating or not. In other words can I get my hamburger for 99 cents or will I get there in the price will be the regular $2.99 as usual.
These issues can hurt all the synergy that would normally be gained in a franchise system through economies of scale and mass advertising dollars. To alleviate such problems in my franchise company and to prevent such things from hurting our regional marketing campaigns on the radio and cable TV, I decided to address this issue in the franchise agreements prior to the commencement of the franchise outlet. Below is the clause regarding pricing, which I put into our franchise agreements;
3.15 Pricing
Franchisee may determine the prices at which Franchisee sells the products and Services, as well as the terms and conditions of sale for such products and Services. Franchisor may from time to time suggest prices to Franchisee for the sale of The Car Wash Guys products and Services, but the Franchisee will not be required at any time to sell at or above such suggested prices.
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You see, consistency is one of the major advantages of franchise systems in the eyes of the consumer and you must protect this advantage to help you or franchisees succeed in the marketplace. You would be well advised to discuss this with a franchise attorney and to 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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