First, to join the headquarters, you need to show your service badge registration certificate. Because the so-called joining is that the headquarters authorizes the brand to the franchise store. In other words, the headquarters must have a brand before it can be authorized to franchise stores. In other words, the headquarters must first obtain the service label registration certificate issued by the Central Bureau of Standards. A while ago, there was a controversy about the chain system of China restaurants. The old and new systems entered the Fair Trade Commission. Later, the losing party was forced to change the brand name, and even the franchisees who had joined the system were forced to change their names. How innocent! Therefore, before joining, franchisees must first confirm that the headquarters really owns this brand, so that they can join with confidence.
Second, the payment method of royalties. Generally speaking, the headquarters will charge franchisees three kinds of fees, namely, joining fee, royalty fee and deposit. The so-called joining fee refers to the fee charged by the headquarters to help franchisees with the overall store opening planning and education and training before opening a store. Royalty refers to the fees that franchisees need to pay for using the headquarters trademark and enjoying goodwill. This is a continuous charge. As long as franchisees continue to use the trademark of the headquarters, they must pay regularly. The payment period can be once a year, quarterly or monthly. As for the deposit, it is the fee charged by the headquarters to ensure the franchisees to effectively perform the contract and pay on time.
Among them, due to the continuous collection of royalties, some franchise headquarters will require franchisees to write a check for the full amount of royalties during the contract period when signing the contract. For example, the contract period is five years, and royalties are paid annually. Some headquarters will require franchisees to pay royalties for five years with five checks at a time. Then there was such a case. A system franchisee opened a shop for two years and closed down because of poor business, but as early as when signing the contract, he handed in a check for five years' commission to the headquarters.
It stands to reason that in the next three years, since the store has stopped using the trademark and goodwill of the head office, there is no need to pay patent fees. However, the head office still rolls the received checks into the bank for withdrawal, which leads to franchisees not only losing their business for two years, but also paying the amount of these withdrawn checks! Therefore, franchisees must remember to add a note to the contract when they meet the requirements of the head office to issue a cheque denomination of all royalties during the contract period. When franchisees close stores and no longer open stores, the head office must return the unexpired royalties to safeguard its own rights and interests.
Third, the supply price of the headquarters. In the general franchise contract, the headquarters will require franchisees to purchase goods from the headquarters, and they are not allowed to purchase goods privately. This is often the most controversial part of the headquarters and franchise stores. Because franchisees often think that the supply price of headquarters is high, they purchase from abroad on their own. However, based on the consistency of the quality of the chain system, the headquarters had to ask the franchise stores to purchase from the headquarters in a unified way, which led to disputes. A more reasonable approach is that franchisees should ask in advance whether the price supplied by the headquarters can not be higher than the market, or whether it is acceptable to be higher than the market, so as to avoid disputes between the two parties on the price afterwards.
Fourth, business circle protection. Under normal circumstances, in order to ensure the operating interests of Jiameng stores, the headquarters will have a business circle guarantee, that is, no second branch will be opened in a business circle. Therefore, franchisees must be very clear about the scope of the business circle. However, it is common that the general department opens a second store while ensuring that it is not far from the business circle, which affects the business of the original franchise stores and causes protests. In fact, if the headquarters is located outside the security business circle, the franchise stores have no right to protest. However, it is worth mentioning that when some chain stores increase or reach saturation, it is difficult to open new stores under the protection of the business circle, so the second brand is developed by accident. It means to use another new brand name, and its business content is exactly the same as that of the original brand, so that it is not limited by the business circle guarantee of the original brand. For example, there used to be a housing intermediary chain system, which was like this. In the end, of course, it would attract a group of boycotts from franchise stores. Therefore, in order to protect their own rights and interests, franchisees should clearly state that the headquarters shall not develop a second brand with the same business content when signing the contract.
Fifth, the non-competition clause. The so-called prohibition of business strife means that the headquarters requires franchisees not to engage in the same industry with the original franchisees during the duration of the contract or within a certain period after the end in order to protect business technology and intellectual property rights. This regulation is to protect the intellectual property rights of the headquarters, and there is nothing wrong with it. The Fair Trade Commission also believes that this will not violate the law. But how long should the non-competition period be reasonable? If it is too long, it may affect the franchisee's right to work in the future. In this regard, there was a chain system that stipulated the non-competition clause as three years, and the franchise stores sued the Fair Trade Commission. The fair thinks the non-competition clause is reasonable, but three years is too long? Later, the headquarters also wisely changed three years to one year. Therefore, franchisees must carefully consider when signing the contract, so as not to affect their future livelihood.
Sixth, the issue of management regulations. Generally speaking, there are as few as ten or twenty franchise contracts, as many as seventy or eighty, and as many as hundreds. However, there is usually an agreement that "matters not covered in this contract shall be handled in accordance with the management regulations of the headquarters. If the franchisee encounters this situation, it is best to ask the headquarters to attach the management regulations to the contract and become an annex to the contract. Because the management rules are formulated by the headquarters, the headquarters can incorporate all the matters not stipulated in the contract into its management rules, modify them at any time, and do whatever they want, and then the franchisees can only be at the mercy of the headquarters.
Seventh, about liquidated damages. Since the franchise contract is drawn up by the headquarters, it will be more beneficial to the headquarters. In terms of liquidated damages, usually only the part for franchisees is listed, while the part for breach of contract by headquarters is not mentioned at all. Franchisees should be able to put forward relative requirements, clarify the penalty clauses when the headquarters breaches the contract, especially the service items and logistics support that the headquarters should provide, and ask the headquarters to actually realize them.
Eighth, the handling of disputes. Generally, the jurisdiction court will be clearly listed in the franchise contract, and usually the court where the headquarters is located is the jurisdiction court. So as to make it more convenient for headquarters staff to travel to and from nearby courts when necessary in the future. It is worth mentioning that a franchise headquarters once stipulated in the contract that franchisees need to go through the mediation Committee of the headquarters if they want to bring a lawsuit to the court. In this case, who are the members of the mediation committee? If all the problems are caused by the headquarters, then the result of mediation will of course be biased towards the headquarters, which is not conducive to franchisees. Because of the contract, franchisees can't ignore the mediation Committee and go to court directly. Therefore, the author suggests that franchisees should ask for deletion when they encounter similar terms.
Ninth, the handling of contract termination. When the contract is terminated, the most important thing for the franchisee is to get back the deposit. At this time, the headquarters will check whether the franchisee has breached the contract and whether there is any debt. At the same time, the headquarters can require franchisees to dismantle their own signboards. If all goes well and there is no debt, the head office will refund the deposit. However, in the event of a dispute, whether to remove the signboard often becomes the focus of wrestling between the two sides. Some headquarters even hire their own employees to remove signboards. In this case, franchisees need to rely on who originally funded the signboard. If the investment is made by the franchisee, the ownership of the signboard "property" should belong to the franchisee. Although the headquarters owns the trademark ownership, it cannot be dismantled without authorization. If it is really to be demolished, it must be enforced by the court. If the headquarters is dismantled by itself, it is a crime of sabotage.
Tenth, this is the last thing to pay attention to, that is, after the contract is signed, both parties must hold one copy each. Once, after a supermarket chain signed a contract with a franchisee, the headquarters left two contracts and did not leave one for the franchisee. Later, he was sued by the Fair Trade Commission for correction. Therefore, franchisees must remember to keep a copy, so that they can clearly understand the contents of the contract and guarantee their rights and interests.
Of course, the most important thing is to read the contents of the contract clearly and understand the contents one by one before signing the contract. If there is anything unclear or unclear, ask the staff at the headquarters clearly. Because only by carefully understanding the contract before signing can we reduce future disputes.