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SAN DIEGO (Blue MauMau) - Robert Purvin, chairman of the American Association of Franchisees and Dealers, discusses with Blue MauMau what franchisors provide the fairest franchise agreements and which ones have drafted the most oppressive. A franchise agreement is the legal document that establishes the conditions of the franchisee and franchisor relationship. The AAFD advocates collective negotiation of the agreement by franchise owners through their independent franchisee association to establish basic rights before any mishap occurs.
In the worst cases, franchise owners "indenture themselves to their franchisors" with few rights, says Purvin. He warns, "It is particularly distressing when I think that five out of every six franchisees who have an honest dispute with their franchisor cannot afford justice and must roll over and accept whatever the franchisor dishes out."
Blue MauMau: What five companies stand out in having the best, most friendly franchise agreements for franchise owner-operators?
Purvin: It is easy to rank the agreements that I have reviewed and graded as conforming to the AAFD Standards. Starting from the top as the "most fair":
Other agreements that I have admired include:
BMM: What companies come to mind in having the worst, most predatory franchise agreements for franchise owner-operators? Why?
Purvin: The list of franchise agreements that give franchisors complete license to adopt and enforce predatory practices is very large, and sadly encompasses the vast majority of franchise offerings—simply because the marketplace has accepted one-sided contracts of adhesion that protect franchisors over franchisee rights. Some very troubling franchise agreements include:
And [not included above are the] many, many minor brands whose agreements simply follow the [worst] model, and the marketplace simply fails to "kick back.''
Mr. Purvin spoke with Blue MauMau in conjunction with the publication of his newly updated book, The Franchise Fraud: How to Protect Yourself Before and After You Invest. This is one of several articles to be published based on an interview with him.