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In India while there are no specific franchise laws, there are a range of laws and regulations that can be made applicable to franchising. These laws include those addressing competition, consumer protection, intellectual property, labor, property and of course taxation.
What is legal aspects of franchising?
As a rule, franchisees own the business and are entitled to keep the profits it generates. The franchisor receives an initial lump sum payment and ongoing fees. The franchisor also owns the brand and all other intellectual property, for example the operating procedures.
What is the legal definition of a franchise?
A privilege granted or sold, such as to use a name or to sell products or services. In its simplest terms, a franchise is a license from the owner of a trademark or Trade Name permitting another to sell a product or service under that name or mark.
Why legal aspect of franchising is important?
A franchise agreement is a legally-binding document which establishes the terms of the relationship between franchisor and franchisee. This is the most important document for franchisers because it sets out the obligations and legal rights for both parties as per franchise contract law.
What are the types of franchise agreement?
Single Unit Franchise Agreement.
This is the traditional and most common form franchising.
Multi-Unit Franchise Agreement.
Master Franchise Agreement.
Laws governing various aspects of franchising in India :-
1. The Indian Contract Act, 1872.
2. The Competition Act, 2002.
3. Income Tax Act, 1961
4. Consumer Protection Act, 1986
5. Arbitration and Conciliation Act, 1996
6. The Foreign Exchange Management Act, 1999
7. The Trademarks Act, 1999, Patent Act, 1970, Design Act, 2000, Copyright Act 1957
Here is a list of few common checklist one can think off before investing in any franchise
#1 Choose the brand carefully
#2 Talk to previous franchise owner
#3 Get professional advice from lawyers
Most of the time franchisee negotiates terms that work for them too.
Term and renewal
Fees and royalty clause
Proprietary marks
Confidentiality clauses
Training
Duty of Franchisor
Duty of Franchisee
Default and Termination
Products and operations standard and requirements
Advertising
Dispute resolution
Post-term obligations
About this video:- In this video we have came up with the legal aspects of the franchise business model and how it will help you grow in your business. Contact Mr. Parvez Alam on +916204668946 for taking their franchise.
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In this Video -
कोनसी चीज़ो का ध्यान रखे Franchise Business मे? | Legalities in Franchise Business | In Hindi
Legal Aspects of Franchise Business
what is franchise agreement
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7 окт 2021
