Owning and Operating a Franchise
By signing that franchise agreement, you may also be agreeing on how you will operate the franchise. Franchisors may expect you to follow policies on:
Policy Manuals - These outline the franchisor's rules on how to run your franchise. If you choose not to follow them and have a visit from a franchisor official, you may be fined or lose your franchise.
Appropriate Dress - While a franchisor can't tell you who to hire, they may require your employees wear a uniform or dress in franchisor clothing.
Hours of Operation - That Taco Bell that stays open until midnight or later is directed by the franchisor, not the franchisee. Most franchisors will tell you what your hours of operation will be and unless you have an agreement that states otherwise. You may have to be open during the hours the franchisor sets for your business.
Personnel Policies - Because franchises have been in business for quite some time, the franchisor has had ample time to create their own personnel policies and procedures including write-up or warning forms, unacceptable behavior, and other things you may be required to follow when it comes to your employees.
Grand Opening - Your franchise agreement should outline if the franchisor will offer you funds or promotional items to help you with your grand opening. Some franchisors leave it all up to the franchisee, however.
When considering buying a franchise, you should understand franchise agreements and how they work. Be sure to have your attorney read the franchise agreement to protect your rights. In the event you need to terminate your franchise agreement, each franchisor has different rules.
Owning and operating a franchise can be cash cows for some business owners and debt consuming for others. Understanding franchise agreements will be the key to your success.
If you're still trying to decide if buying a franchise is the right path for you, you may want to check out these additional resources on the pros and cons of franchise ownership: