Franchisee's Obligations Example | Sample Franchise Disclosure Document | Item 9:

ITEM 9: FRANCHISEE’S OBLIGATIONS

This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.

Obligation Section in agreement Disclosure document item
a. Site selection and acquisition/lease Section 2A of franchise agreement Items 6 and 11
b. Pre-opening purchase/leases Section 3D of franchise agreement Item 8
c. Site development and other pre-opening requirements Sections 3A and 3B of franchise agreement Items 6, 7, and 11
Obligation Section in agreement Disclosure document item
d. Initial and ongoing training Section 5 of franchise agreement Item 11
e. Opening Section 4 of franchise agreement Item 11
f. Fees Section 6 of franchise agreement Items 5 and 6
g. Compliance with standards and policies/operating manual Section 8A of franchise agreement Item 11
h. Trademarks and proprietary information Section 7 and 11 of franchise agreement Items 13 and 14
i. Restrictions on products/services offered Section 12 of franchise agreement Item 16
j. Warranty and customer service requirements Section 8B of franchise agreement Item 11
k. Territorial development and sales quotas Not Applicable.
l. Ongoing product/service purchases Section 9 of franchise agreement Item 8
m. Maintenance, appearance, and remodeling requirements Sections 8C and 10 of franchise agreement Item 11
n. Insurance Section 13A of franchise agreement Items 6 and 8
o. Advertising Section 15 of franchise agreement Items 6 and 11
p. Indemnification Section 13B of franchise agreement Item 6
q. Owner’s participation/management/staffing Sections 4, 5, and 14 of franchise agreement Items 11 and 15
r. Records and reports Section 17A of franchise agreement Item 6
s. Inspections and audits Section 17B of franchise agreement Item 17
Obligation Section in agreement Disclosure document item
t. Transfer Section 18 of franchise agreement Item 17
u. Renewal Section 20 of franchise agreement Item 17
v. Post-termination obligations Section 22 of franchise agreement Item 17
w. Non-competition covenants Section 11, 18, and 22C of franchise agreement Item 17
x. Dispute resolution Section 24 of franchise agreement Item 17
y. Other: Guarantee of franchisee obligations (Note 1) Section 25 of franchise agreement
Notes: (1) Each individual who owns a 5% or greater interest in a franchisee that is a corporation or other business entity must sign an agreement not to compete (Exhibit H) and an agreement assuming and agreeing to discharge all obligations of the “franchisee” under the Franchise Agreement (Exhibit I).

CREDIT: The content of this post has been copied or adopted from the Federal Trade Commission’s Franchise Rule Compliance Guide.