Assignment 5: Your Own Franchise, Part 2
Portia L Fairley
Chain Management and Franchising
Dr. Warren Jahn
September 3, 2013
Evaluate your legal rights as a franchisee to determine if they favor the franchisor or the franchisee, or both equally.
The legal obligations that a franchisor and franchisee have to each other are spell out in the franchise agreement. For a business relationship to work, both sides need to understand their basic obligations to establishing a successful company. The skills, experience and determination that both the franchisor and franchisee bring to the table that help to make a franchise arrangement profitable. The signed franchise agreement contains written claims that the writing constitutes the entire agreement between the parties, franchisees should be aware that courts have been increasingly willing to go beyond the terms of the written franchise agreement to define the nature and extent of the enforceable rights and remedies of the parties. The enforceable agreement between franchisor and franchisee may be different than, or even contrary to, the written provisions in the franchise agreement. Often there are oral communications between the franchisor and the franchisee at the time the decision to purchase the franchise is made. In addition, oral commitments made between franchisor representatives and the franchisee during the course of the franchise relationship. These communications, if enforced, may give the franchisee legal rights beyond those set forth in the written agreement. How this works in practice is that most courts are willing to allow testimony as to communications to explain or clarify ambiguous writings. Additionally, evidence of the custom and practice in a particular industry and the course of conduct between the particular franchisor and franchisee, is generally admissible to assist the jury in determining what the agreement was. Therefore, if a franchisor has acted inconsistently concerning its...