franchise agreements

What is the name of your state?NEW YORK

If a franchise agreement has language in it that says their may be significant changes to some areas in the next franchise agreement, can the Franchisor change the next franchise agreement so signficiantly that it would be prohibitive to sign it?

And if we didn't sign, there is language in the current agreement with non compete clauses thereby putting us out of business!


Thanks for your assistance!

ashrand said:

What is the name of your state?NEW YORK

If a franchise agreement has language in it that says their may be significant changes to some areas in the next franchise agreement, can the Franchisor change the next franchise agreement so signficiantly that it would be prohibitive to sign it?

**A: yes.
*********

And if we didn't sign, there is language in the current agreement with non compete clauses thereby putting us out of business!


Thanks for your assistance!

Click to expand...

**A: thanks for letting us know.

Need to be careful...

Yes, any business contract can include language that allows one party to change terms either during the contract or upon renewal. And yes, the terms could be such that you wouldn't want to continue or renew. There are some limits to such things, but you need to be very careful. I've heard of some "franchises" that use this tactic to determine if a given market area is worth pursuing. If the franchisee is successful, they amend the contract to put them out of business and then move into the market themselves.

You probably want to look into this very carefully...

I do not understand signing to buy a franchise without getting an attorney to review the entire agreement. Very poor business practice.