Agreements drawn up that require franchisees to abide by stringent regulations set by the franchisor are legal if necessary to _____.

Question

Quizplus · Accepted Answer

Agreements that require franchisees to adhere to strict regulations are legal as long as they are necessary to maintain a uniform chain-like image. This is because consistency is a key aspect of a successful franchise system, and franchisees must operate their businesses in a manner consistent with the franchisor's brand and image. Constraints on decision making and requirements to purchase specific goods or services may also be necessary to maintain consistency and protect the integrity of the franchise system, but these should not be the primary motivation for strict regulations. Additional revenues for the franchisor should be a secondary benefit, not the main purpose of strict regulations.

Agreements Drawn Up That Require Franchisees to Abide by Stringent