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Is it true that franchisors do not amend their franchise agreements?
Yes, or at least they shouldn’t. Franchisors go to a great deal of trouble and expense having their franchise agreement prepared. It is inevitably a one-sided agreement in favour of the franchisor, but that is only to be expected since the franchisor is passing on its know how, confidential information, technical expertise and brands to a third party - the franchisee - and therefore is entitled to make sure the franchisee doesn’t misuse these valuable elements.Inevitably franchisees will see things they don’t like in the franchise agreement, but the role of their franchise lawyer is simply to point out those provisions in the agreement that are unfair, unusual or unworkable. Ultimately, if there are provisions that fall within this category an ethical franchisor would want to address them going forward and amend the agreement, so there may be scope for correcting obvious errors.What there is no scope for is substantial amendments to the franchise agreement because it would be an administrative nightmare for a franchisor to have franchise agreements entered into in different formats by different franchisees, plus it would be enormously time consuming for a franchisor to have to negotiate a franchise agreement every time it is issued. It is for these reasons that franchisors normally adopt a ‘take it or leave it’ approach. The principal exception is where franchisors are just starting their franchise activities and in this situation there may be scope for the first few franchisees who are inevitably taking a bigger risk to negotiate beneficial financial terms.
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