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What Are Examples of Franchisor Controls?


The most basic controls are those that relate to operating a system so that things are done in a standardized manner, and that's certainly very understandable. You're buying into a system, you want to have standards met throughout that system, but the things that a franchisor can control is extensive. A franchisee should look at item nine in their FDD and see what kind of obligations are imposed upon them by the franchisor. It's extensive, and you need to be aware of that. It's everything from the operating hours that you can be open, when you have to close, to insurance requirements. There is so much there.


I think it's indicative of the franchisor-franchisee relationship that the franchisor through the FDD usually has the right to own your better idea, and by that I mean that if you come up with something better that improves the system, it's not your idea, legally it's their intellectual property.

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