October 23, 2015

Striking a Balance: Brian Schnell on the Future of Franchise Agreements

In an industry-wide shift, franchises are rethinking franchise agreements in an effort to improve working relationships between franchisors and franchisees. As detailed in an article published on Franchise.com, franchises are exploring ways “to make [franchise agreements] more balanced, to shift the preponderance of power from franchisors to create a more equitable document.” Brian Schnell, chair of Faegre Baker Daniels’ franchise practice, said making franchise agreements more “balanced” is important for franchisors looking to attract top franchisees, but that a happy medium can be difficult to attain.

“Balance doesn't mean mutual provisions. It doesn't mean a democracy. It doesn't mean that a franchisor, in evaluating a system change, is going to take a vote. That's not balance," Schnell said. “It is, in my perspective, finding that balance that allows the franchisor to do what it needs to do, and that allows the franchisee to do what it wants to do—within the context of being part of the brand and the system. And that's easier said than done."

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