Anyone in the food industry will agree that the three most important elements of success in franchising are location, location, and location. Where one chooses to set up their business has a direct, substantial impact on customer inflow, top-line sales, and bottom-line profits. The restaurant’s setting needs to be able to support the business now and in the future as most franchise agreements have an initial term of 10 years (and often undergo renewals).
By Frank Zaid
Q: Can a franchisor deliver a disclosure document to a franchisee and sign a franchise agreement before a location for the franchise has been determined? In such situations, the FDD cannot include a copy of the head lease, of course, because it does not yet exist.
The Ontario Superior Court recently found franchisee Raibex Canada in Mississauga, Ont., was entitled to rescind its franchise agreement with All Star Wings and Ribs (ASWR) because the franchise location and the head lease were not established before the disclosure document was provided.