Renewal Provisions: What an Existing Franchisee Should Do
If you are an existing franchisee, re-read the renewal terms of your franchise agreement. If this typical provision is in there, it's still not too late to do something.
If there is no independent franchisee association operating within your system, the first thing to do is help organize an independent franchisee association. The American Association of Franchisees and Dealers ("AAFD") is there to help you with your organizational efforts. The AAFD can be reached at (800) 733-9858. If your franchise system has an independent franchisee association in place and functioning (not a franchisor-controlled franchisee advisory council), you need to make sure one of the priority objectives of the association is to collectively negotiate the terms of any changes to the franchise agreement as well as try to "renegotiate" the existing franchise agreement where problem areas exist.
Change is inevitable. Change is necessary. However, in most contractual relationships, change is effectuated through both parties to the contract agreeing to the change. The aberration reflected in franchising--that of unilateral modification--needs to be eliminated. The franchisor and its franchisees, along with each of their experienced franchise counsel, need to sit down and discuss what changes are necessary to keep the franchise system viable in the marketplace, not just for the franchisor, but also for the existing franchisees.
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