Answered Essay: When signing up for a franchise contract, the franchise and franchisees make out

When signing up for a franchise contract, the franchise and franchisees make out a agreement. what is the most important item in the franchise agreement document? and why?

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Answer

The most important point that should be taken into consideration and the most important item in the mentioned document is strictly defined guarantees. This is the most important part of the document as most of the financial and unforeseen financial expenses are included in this section.

This section is usually defined very loosely by the entity taking the franchisee so that they do not have to bear financial expenses that occur in later part of the business.

One should make sure that financial expenses should be reasonable and rationally agreed upon by both the parties. Franchisors will definitely try and include many third entities but that should usually be avoided as it weakens the guarantee section of the document.

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