Information Sharing between Franchisor and Franchisee

Franchisor and franchisee partner and act in good faith to sustain each other. The franchisee operates an individual business unit or a number of them and the franchisor ensures that uniformity in the standards and the right quality of the product or service is delivered.

The franchisee is entitled to certain rights, which in most cases do not get covered under any specific laws but general agreement and mutual understanding between the franchisee and the franchisor. Some of these rights, which pertain to information sharing, are given below:

Details of the franchisees: The franchisor must provide the details including names, addresses and phone numbers of all the franchisees associated with the franchisor.

Details of the Franchisor’s business experience: Franchisee can ask for the details of the business experience of the franchisor or the one who runs it, even any previous experience prior to the organisation of franchise business.

Source of Income: Though this information is concealed but it is the right of the franchisee to know about the source of income of the franchisor. It prevents the exploitation of the franchisee by franchisor.

Details of the Directors and Business Structure: Franchisee can further ask about the organisation structure, details of the directors and any person the franchisee feels is important for the business.

Financial Records: The franchisee can also demand the financial records of previous months, usually not more than three, from the franchisor in order to have an update of the financial status of the franchisor.

These are some important rights that a franchisee is entitled to. The acknowledged franchise providers have no problem in sharing the information. It also yields to a transparent system to help the interests of the franchisee and the franchisor.

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