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 nationalfranchise.com 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.