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a franchisor has certain rights that are designed to protect its brand when it is be 611680

Rights held by franchisor

A franchisor has certain rights that are designed to protect its brand when it is being licensed by a franchisee. Activities that significantly affect the franchisee”s returns include:

  • determining or changing its operating policies;
  • setting its prices for selling goods;
  • selecting suppliers;
  • purchasing goods and services;
  • selecting, acquiring or disposing of equipment;
  • appointing, remunerating or terminating the employment of key management personnel; and
  • financing the franchise.

If certain of the activities above are directed by one investor (e.g. the owners of the franchisee), and other activities are directed by another investor (e.g. the franchisor), then the investors will need to determine which activity most significantly affects the franchisee”s returns, as discussed at above.

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