Food franchise is a huge business and many snacks and fast food brands are already having better hands over franchises. It is an attractive business opportunity for entrepreneurs to gain exposure in the food business. Kiwi Foods is the leading snack brand in India offering good franchise business for entrepreneurs. However, to hold a good franchise relationship, it is important to have a clear understanding in terms of the contract and what should be included for the smooth flow of business.
There are different mechanisms and conditions need to be followed by both the party and should be mentioned in the contract itself.
If you are entering into the food franchise business, then here are few things you need to consider before signing the contract-
1. Intellectual Property-
The theme of the franchise agreement is the licensing of intellectual property rights. In many cases, the franchisor allows the franchisee to use the intellectual property like copyright, trademarks, and business concepts. It is important that the agreement should specify which of the intellectual property is licensed to use.
2. Training-
For a franchisor, it is important to ensure there is uniformity across all the franchise operation. The contract should provide details about the initial training to the staff, which will help them to communicate and standards to maintain. It is the duty of the franchisor to provide good support, training, and the right supervision required by the franchisee.
3. Royalty-
In addition to the initial fees, the franchisee needs to pay a share of revenue percentage to the franchisor. You need to check out the structure of different royalties used by different food franchisors and mention it on the contract. Different franchisors have different royalty exchange, as Kiwi Foods have specific royalty for franchisees. Everything must be mentioned in the franchise agreement, the percentage & type of royalty, mode of payment, and due dates decided.
4. Renewal Terms-
If the franchise business is for specific years, then you need to mention the same in the agreement. If you want to renew the agreement after certain years, then it should be mentioned in the agreement.
5. Marketing and Advertising-
The franchise agreement should also include all the details about the marketing and advertising ideas to reach out to the audience. Usually, franchisors are the ones who promote the brand and the franchise has the role of contribution. Therefore, the contract should mention all the details about the marketing.
So in order to have a dispute free franchise and a successful business it is important to have all the terms & conditions clear at first hand.