Top Ten Essentials for Brand Apparel Joining

Before the franchisees sign the franchise contract, they should have an in-depth understanding of the contract to ensure their own rights and interests. Do not think that joining the contract is a model of the headquarters system can not be modified.

In recent years, with the prevalence of entrepreneurship, there are more and more people joining the franchise stores, and the number of franchise disputes has also increased. The occurrence of these disputes was due to the joining of the contract. Before joining the headquarters, the franchiser did not elaborate on the content of the contract, and the franchisees often signed the contract without further understanding. Under the ambiguity of the parties, they would It is not surprising that there are disputes.

In fact, before the franchisees sign the franchise contract, they should have an in-depth understanding of the contract to ensure their own rights and interests. Do not think that joining the contract is a model of the headquarters system can not be modified. In fact, the contract should be made after mutual agreement between the two parties. In other words, franchisees should not only look at the content with clear eyes, but also have the right to request amendments. This article only provides the following ten points of attention for the franchisor as a reference when signing.

First, request to join the headquarters to show the service mark registration certificate

Because of the so-called joining, that is, the headquarters authorized the brand to use the franchise, in other words, the headquarters must first have the brand before they can authorize the franchise. In other words, the headquarters must first obtain the service badge registration certificate issued by the Central Bureau of Standards. A dispute over a Chinese restaurant chain system took place a while ago. Both the old and new systems entered the Fair Trade Commission. Later, the losing party was forced to change its brand name, and the franchise that had joined the system was forced to change its name. Nothing! Therefore, before joining the franchisee, be sure to first confirm that the headquarters does have this brand, in order to join with confidence.

Second, the payment method of royalties

In general, the headquarters will charge the franchisee three kinds of fees, namely, franchise, royalties and guarantees. The so-called franchise gold refers to the headquarters's plan to help the franchisees in the opening of the shop as a whole, and the fees for education and training. The premium refers to the franchise's use of the headquarters's trademark and the cost of enjoying the goodwill. This is a continuous charge. As long as the franchise continues to use the headquarters's trademark, it must pay regularly. The payment period may be paid once a year, quarterly, or monthly. As for the margin, it is the fee charged by the headquarters to ensure that the franchisee will actually fulfill the contract and pay the purchase price on time. Among them, because the premium is a continuous charge, some franchise headquarters will sign the contract and require the franchisee to open a cheque for the full amount of the premium within the contract period one time. For example, the term of the contract is five years, and the premium is paid annually. Some headquarters asked the franchisees to pay five years of royalties and open five cheques at one time to the headquarters. Later, there have been cases in which a franchisee of a certain system opened a store for two years and closed down because of bad business. However, as early as the signing of the contract, cheques for five years of royalties had been paid to the headquarters. It stands to reason that in the following three years, since the stores have no longer used the trademarks and goodwill of the headquarters, they do not need to pay the premiums. However, the headquarters still rolled the checks that have been collected into the bank to withdraw funds, which has caused the franchisee not only to If you lose business for two years, you have to pay the amount of these checks that have been issued! Therefore, if the franchisee encounters a cheque denomination of all royalties within the contract period of the headquarters request, it must be remembered to add a point to the contract. When the franchisee closes the shop, the headquarters must return the right to not expire. Gold to protect their own rights and interests.

Third, the price issue of the headquarters supply

In the general franchise contract, the headquarters will require the franchisee to purchase the goods from the headquarters, and must not purchase the goods privately. This is often the one where the headquarters and franchise shops have the most disputes. Because franchisees often think that the supply price of the headquarters is high, they have to purchase from outside. However, based on the consistency of the quality of the chain system, the headquarters had to demand that the franchise stores must be uniformly purchased from the headquarters, and the dispute then occurred. The more reasonable way is for franchisees to sign the contract, that is, the price of the headquarters supply must not be higher than the market quotation in advance, or the percentage of market quotation higher than the market price is acceptable, so as to avoid disputes between the parties for price issue afterwards. endlessly.

Fourth, business district protection issues

Usually joined the headquarters to ensure the franchise store's operating interests, will have a business district protection, that is, within a certain business district will no longer open a second branch. Therefore, the extent to which the franchisees have to protect the business district must be very clear. However, the common situation is that the headquarters is not far from the business district, and when the second store is opened, it will affect the business of the original franchise store. In fact, if the headquarters is opened outside the protection of the commercial area, the franchise does not have the right to **. However, it is worth mentioning that certain franchise systems have been difficult to open new franchise stores under the protection of commercial districts due to an increase in franchise stores or when they have reached saturation levels. This means that another brand name is used, and the content of the business is exactly the same as the original brand, so that it is not necessary to restrict the restriction of the original brand's business district. For example, once there was a certain home agency chain system, this would eventually lead to a resistance from the franchise chain. Therefore, in order to protect their own rights and interests, the franchisees should indicate that they should no longer develop the second brand with the same business content.

Fifth, non-competition clauses

The so-called competition prohibition is that the headquarters for the protection of business technology and intellectual property, not because of the open to join and outflow, requiring the franchisee during the duration of the contract, or within a certain period of time after the end, shall not engage in the same industry with the original franchise provisions. There is nothing wrong with this specification aimed at protecting the intellectual property rights of the headquarters. The Fair Trading Commission also believes that this will not be illegal. But how long should the duration of the prohibition of competition be reasonable? If it is too long, it may affect the future work rights of the franchisees. In response, there was a three-year non-compete clause for a certain chain system, and the franchise went to the Fair Trade Commission. The fair is of the view that the non-compete clause is reasonable, but does it mean that the three years are too long? Later, the headquarters also very sensibly changed from three years to one year. Therefore, franchisees must consider clearly when signing contracts so as not to affect future livelihoods.

Sixth, the issue of management regulations

The general franchise agreement content is as few as ten or twenty articles, and as many as seventy or eighty articles may be more than one hundred. However, there is usually such a provision that “This contract does not cover matters that need to be handled in accordance with the regulations of the headquarters.” if the franchisor In such a situation, it is better to ask the headquarters to attach management regulations to the back of the contract and become an annex to the contract. Because the management regulations are formulated by the headquarters, the headquarters can put all the items not included in the contract into its management rules, and they can modify and do whatever they want. At that time, the franchisees have no choice but to leave the headquarters.

Seventh, penalties for breach of contract

Since the franchise contract is drawn up by the headquarters, it will be more advantageous to the headquarters. In the case of penalties for violation of the contract, only the part for the franchisees will usually be listed, and the headquarters will not be mentioned in violation of the contract part. The franchisees should be able to put forward relative requirements on this matter, specifying the penalties for defaulting at the headquarters, and in particular stipulating that the headquarters should provide service items and logistical support. The headquarters should be required to be reached.

Eighth, dealing with disputes

The general franchise agreement will state the jurisdiction of the court, and it will usually be the court of the district where the headquarters is located. For the sake of future needs, it is more convenient for headquarters staff to travel to nearby courts. It is worth mentioning that there has been a certain joining headquarters in the contract stipulated that before the franchisee wants to file a lawsuit with the court, it must first be mediated by the mediation committee of the headquarters. In this case, we should first understand that the members of the conciliation committee are those members. If all are headquarters personnel, the result of the mediation will of course be partial to the headquarters, which will not benefit the franchisees. Due to the contract, the franchisees cannot ignore the mediation committee and directly sue the court. Therefore, the author suggests that franchisors should request deletion when they encounter similar terms.

Ninth, the termination of the contract

When the contract is terminated, the most important thing for franchisees is to get back the deposit. At this time, the headquarters will check whether the franchisee has violated the contract or have accumulated money. At the same time, the headquarters may ask the franchisee to remove the signboard. If all goes well and there is no accumulated payment, the headquarters will refund the deposit. However, if there is a dispute, whether or not to dismantle the signboards will often become the focus of both parties' efforts. Some headquarters even use their own staff to dismantle the signboards. If the franchisees encounter this situation, they will need to decide which one they originally funded. If the franchisees funded, then ownership of the signboard "property" should belong to the franchisee. Although the headquarters has trademark ownership, it cannot be removed without authorization. If you really want to demolition, you must enforce it through the court. If the headquarters dismantles itself, you will commit the crime of damage.

Tenth, this is the last point that should be noted, that is, after the contract is signed, both parties must each hold one

Once there was a chain agreement with the franchisee after the supermarket chain, the headquarters left two contracts, did not leave a copy to the franchisees, and was subsequently sued to the Fair Trade Commission for correction. Therefore, franchisees must remember to keep one copy in order to clearly understand the contents of the contract and ensure their own rights and interests.

Of course, the most important thing is to look at the contents of the contract carefully, and then read the contents one by one. If there is any unknown or unclear place, you should ask the personnel at the headquarters. Only by carefully understanding the contract before signing the contract can the future disputes be reduced.