Franchise chain notes
Franchise chain business is not as easy as people think, practice shows that to succeed in the franchise chain, you have to pay special attention to the following matters.
Matter of fact: choose to join the industry
In recent years, the emergence of a new popular chain of industry brands in the minority, but there are a lot of brands did not "fire" how long it disappeared. It can be said that the franchise chain of brands almost every year to reshuffle, which undoubtedly increased the franchise chain entrepreneurs to choose the difficulty. Therefore, when choosing to join the industry, must stand the test of the market: chain management system has been at least 5 years.
Matters 2: the higher the joining requirements, the greater the chance of success
Join the chain, for those who want to start their own business, eliminating the need to find a business project troubles, is indeed a shortcut to success. According to a survey, Japan's retail industry, 80% of the independent store in the first year of closure, can last until the fifth year of only 8%; and chain stores in the first year of the end of the business only 20%, 77% of the chain stores can survive to the fifth year, this survey proves that "join must be more than their own business is cost-effective." But these data do not mean that the franchise will be 100 percent successful.
According to the survey, looking for a certain store experience, and the number of chain stores up to a certain size or the development of at least five years of headquarters, a competitive chain of brands, more business security. Some emerging franchise system, itself in the market development time is not long enough, has not gone through the market experience, the customer's consumption habits have not yet developed, easy to cause temporary business booming illusion. When choosing a weak chain brand, although you can pay less to join, but relatively speaking, can enjoy the headquarters of the resources and less help; many things have to rely on the franchisee to take care of their own, the competitiveness of the natural weaker.
Competitive chain brands due to the development of a better future, joining the natural requirements are also high. But understand that the more stringent conditions to join the brand tends to have a more complete system of franchising as well as more powerful financial strength and strength, but more capable of ensuring that the franchisee is profitable. Because of this, the more reputable chain companies, the selection of franchisees when the gate is more rigorous.
Matter of three: the best with the chain headquarters "face to face"
Now a lot of chain companies, coupled with the first few years of the franchise profits can be considerable, so that some of the emerging chain companies and franchisees are more impatient. Some entrepreneurs eager to start a business, only to listen to some of the chain's promotional materials on the hasty signing of the franchise, until there are disputes only to find that the chain headquarters than their own store is still small, or even an empty shell, there is no store to solve the problem of the ability and experience. Therefore, a personal trip to the headquarters and its franchise to collect first-hand site information, very necessary.
Additionally: Ten Precautions for Franchise Signing
In recent years, with the growing popularity of entrepreneurship, join the chain of franchises more and more people to join the disputes have also increased. These disputes are half due to the franchise contract, the franchise headquarters in the franchise before, did not join the franchisee detailed description of the contract content, and the franchisee often do not have an in-depth understanding of the signing of the contract, on both sides of the respective fuzzy processing, will produce disputes is not surprising.
In fact, the franchisee in the signing of the franchise contract before the contract should be in-depth understanding of the contract content to ensure their own rights and interests. Do not think that the franchise contract is the headquarters of the model of the system can not be modified. In fact, the contract should be made through mutual agreement. In other words, the franchisee should not only open their eyes to see clearly the content, but also have the right to request changes in the content. This article only provides the following ten points of attention for the franchisee to do as a reference when signing.
First, should be required to join the headquarters to show the service mark registration certificate. Because the so-called franchise, is the headquarters of the brand will be authorized to the franchise to use, in other words, the headquarters must first have the brand, in order to authorize the franchise. That is to say, the headquarters must first obtain the Central Bureau of Standards, issued by the service mark registration certificate before. A while ago that a Chinese restaurant chain system of disputes, the old and new two systems into the Fair Trade Commission, and then the losing party was forced to change the brand name, and even make has joined the system of franchises are also forced to change the name, it is really how innocent ah! So the franchisee before joining, be sure to confirm that the headquarters does have this brand, in order to rest assured to join.
Second, the payment of royalties. Generally speaking, the headquarters will charge the franchisee three kinds of fees, respectively, is the franchise fee, rights and deposit. The so-called franchise gold, refers to the headquarters in the store before helping the franchisee to do the overall store planning, and education and training fees charged. The rights of the franchise refers to the use of the headquarters of the trademark, as well as the enjoyment of goodwill required to pay the fee, which is a continuing charge, as long as the franchise continued to use the headquarters of the trademark, it must be paid regularly. The payment period may be once a year, quarterly or monthly. As for the security deposit, is the headquarters to ensure that the franchisee will indeed fulfill the contract, and punctual payment of goods and other fees charged. Among them, due to the royalties are ongoing charges, some franchise headquarters will be in the signing of the contract, the franchisee is required to open a contract period of the full amount of the royalties of the check, such as the contract period of five years, the royalties to take the yearly payment method, some headquarters will require the franchisee will be five years of the royalties, one time to open a full five checks to headquarters. Later there has been such a case, a system of franchisees opened two years, because of poor business and closed down, but as early as the signing of the contract, has opened a full five-year royalties check to the headquarters. According to reason, the latter three years since the store has been closed no longer use the headquarters of the trademark, goodwill, no longer need to pay royalties, however, the headquarters will still have collected the checks rolled into the bank to withdraw funds, the franchisee, not only lost two years of business, but also have to pay the amount of these checks that have been issued! Therefore, if the franchisee meets the headquarters requirements of the contract period, all the rights of the cheque face value, must remember to add a note on the contract, when the franchise closed store no longer open store, the headquarters must return the unexpired rights of the money, in order to protect their own rights and interests.
Third, the price of the headquarters supply problem. General franchise contract, the headquarters will require the franchisee must be to the headquarters of the goods, not private goods. This point is often the headquarters of the most contentious link with the franchise. Because the franchise often think that the headquarters of the supply price is high, so they have their own procurement outside. But the headquarters based on the consistency of the quality of the chain system, had to ask the franchise must be unified to the headquarters procurement, so the dispute arose. A more reasonable way is to join the franchisee in the signing of the contract, that is, should be required in advance the headquarters of the supply price shall not be higher than the market price, or how much higher than the market price is acceptable, so as to avoid the two sides in order to avoid the price of the problem of endless disputes.
Fourth, the business circle protection problem. Usually join the headquarters to ensure that the franchise's operational interests, there will be a business circle protection, that is, within a business circle will no longer open a second branch. Therefore, the franchisee to protect the scope of the business circle is how big, must be very clear. However, a common situation, is the headquarters in the protection of the business circle outside the distance, and then opened a second store, affecting the original franchise business and triggered protests. In fact, if the headquarters is opened in the protection of the business circle outside the place, the franchise does not have the right to protest. However, it is worth mentioning that some chain system because the franchise has increased or has reached saturation, in the protection of the business circle, it has been very difficult to open new franchises, so they took the trick to develop a second brand. Meaning that the use of another new brand name, and business content and the original brand is exactly the same, so you can not be limited by the original brand of the business circle protection restrictions. For example, there has been a housing agency chain system is so, and finally, of course, will attract the franchisee's group resistance. Therefore, the franchisee in order to protect their own rights and interests, in the contract, it is best to set out the headquarters shall not develop business content is identical to the second brand.
Fifth, the non-compete clause. The so-called non-compete, is the headquarters for the protection of business technology and intellectual property, not open to join the outflow, the franchisee in the contract period, or the end of a certain period of time, may not be engaged in the same industry with the original franchise provisions. This specification aims to protect the intellectual property rights of the headquarters, and there is nothing wrong with it, and the Fair Trade Commission also considered that this move is not illegal. But how long should the non-compete period be reasonable? If it is too long, it may affect the franchisee's rights and interests in the future. In this regard, the non-competition clause of a chain system was stipulated to be three years, which was sued by the franchisee to the Fair Trade Commission. The Fair Trade Commission considered that the non-competition clause was reasonable, but whether three years was too long? Subsequently, the headquarters of the chain had the good sense to change the three years to one year. Therefore, the franchisee must consider clearly when signing the contract, so as not to affect the future livelihood.
Sixth, management regulations. General franchise contract content is less than a dozen twenty, more than seventy, eighty hundreds of articles, but there is usually such a provision, "the contract is not complete, all in accordance with the headquarters of the management regulations for. If the franchisee encountered such a situation, it is best to ask the headquarters will be attached to the management rules and regulations attached to the back of the contract, become an annex to the contract. Because the management regulations are formulated by the headquarters, the headquarters can not be contained in the contract, all the matters into its management regulations, at any time to modify, do whatever you want, then the franchisee will have to be at the mercy of the headquarters.
Seventh, the penalty for breach of contract. As a result of the franchise contract is drawn up by the headquarters, so the headquarters will be more favorable, in violation of the contract penalties, usually only listed on the part of the franchisee, and the headquarters of the part of the contract violation is not mentioned. Franchisees should be able to put forward relative requirements, clearly defined headquarters in the event of breach of contract penalties, especially the provisions of the headquarters should provide services and logistical support, the headquarters should be required to really achieve.
Eighth, on the handling of disputes. The general franchise contract will be clearly listed on the jurisdiction of the court, and is usually the headquarters of the district court as the court of jurisdiction. In case there is a need in the future, the headquarters staff to travel to the nearby court is more convenient. It is worth mentioning that there has been a franchise headquarters in the contract, the franchisee wants to file a lawsuit to the court before the need to go through the headquarters of the mediation committee mediation. In this case, should first understand the composition of the mediation committee for those people? If all the headquarters of the personnel, then the results of mediation, of course, will be biased in favor of the headquarters, and is not conducive to the franchisee. Due to the contract, the franchisee can not ignore the mediation committee, and directly to the court. Therefore, the author suggests that the franchisee should ask for the deletion of similar clauses when they come across them.
Ninth, the termination of the contract. When the contract is terminated, the franchisee, the most important thing is to get back the deposit. At this time, the headquarters will review the franchisee whether there is a violation of the contract or owed money, at the same time, the headquarters may require the franchisee to remove the signboard, if all goes well and there is no money owed, the headquarters that is the return of the deposit. However, if there is a dispute, whether to remove the signboard often becomes the focus of the two sides of the tug-of-war. Some headquarters will even hire their own workers to remove the sign, the franchisee encountered this situation, depending on who originally funded the sign. If funded by the franchisee, then the signboard "object" ownership should be owned by the franchisee, although the headquarters has the trademark ownership, but can not be removed without authorization. If you really want to remove it, it must be enforced through the court, and if the head office removes it on its own, it commits the crime of vandalism.
Tenth, this is the last point should pay attention to, that is, after the signing of the contract, both sides must be a copy of each. Once a chain of supermarkets and franchisees signed a contract, the headquarters to stay two contracts, and did not leave a copy to the franchisee, and was later sued to the Fair Trade Commission to correct. So the franchisee must remember to keep a copy of their own, in order to clearly understand the content of the contract, to ensure their own rights and interests.
Of course, the most important thing is to read the contract clearly before signing it, and to understand the contents one by one, if there is any uncertainty or ambiguity, you should ask the headquarter staff for clarification. Because only in the signing of the contract, carefully understand the contract, in order to reduce future disputes.