Definition Definition

Individual franchise agreement

Definition (1):

The individual franchise agreement is the most common type of franchise agreement, which involves the sale of a single franchise for a specific location.

For example, an individual may purchase a CD Warehouse franchise to be constructed and operated at 901 Pearl Street in Boulder, Colorado.

Definition (2):

The defines the individual franchise agreement in the following way,

“Individual unit is the most familiar form of franchising. By signing a Franchise Agreement, the Franchisee receives the right to operate a single franchise operation, often within a protected territory.”

An individual franchise agreement can serve people with the following benefits:

  • A franchisor can more simply and easily manage her/his growth.
  • Many people believe that an owner as an operator can be the most productive manager.
  • Often, a franchisee-managed location can be more cost-effective because no manager’s salary is involved there.
  • By using this approach, a person can learn the way to be a franchisor by selling just a few units her/his first year.
  • Far more individuals are available who can afford to start and manage a single franchise rather than various locations.
  • If any problem occurs with a franchisee who has signed this agreement, this issue impacts only one location.
  • A person can determine if the franchisee can manage more than one franchise before making a commitment to them by signing this agreement. Then s/he can grant additional operations using this agreement.
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