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Participation May Vary, But When?

A comedian by the name of Mitch Hedberg made a poignant observation once in one of his comedy sketches. He noticed something that everyone has probably heard on a national commercial, or seen on an advertisement for a promotion, but few have questioned. It's the line: prices and participation may vary.

He joked that if he were a franchise owner, he wouldn't participate in anything the ad claimed. Fans of his work generally laugh at this because it seems so absurd that a franchise wouldn't participate in a national campaign. But is it really that absurd? Can a franchise really pick and choose which campaigns it participates in?

If you're like a lot of residents here in Washington, D.C. then you might be surprised to learn that a franchisee may be able to pick and choose which aspects of the franchise model they follow depending, of course, on the terms of their franchise agreement. Let's take a look.

When a person decides to operate a franchise, they must enter into an agreement with the franchisor. Basic franchise agreements, say in the restaurant industry for example, dictate what items will appear on the regular menu, how items will be prepared and presented to the customer, and even where the franchisee gets their supplies. The agreement may also explain which national promotions the franchisee must participate in and which ones they can opt out of.

It's important to point out though, as we mentioned above, participation all depends on the terms of your agreement. If you misunderstand these terms or choose to ignore them altogether, you could be in violation of your contractual obligation, which can lead to litigation. And even though Mr. Hedberg's jokes on the subject may be funny, litigation for the breach of a franchise agreement is definitely no laughing matter.

Source: Bright Hub, "What Rules Do Franchises Have to Follow?" Jean Schied, May 20, 2011

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About Mario Herman

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Based in Washington D.C, franchisee attorney Mario Herman represents franchisees domestically and internationally in negotiation, mediation, arbitration, and litigation with their franchisors. Mr. Herman affiliates with local counsel on an as needed basis. He has practiced nationally and internationally for twenty five years, has an excellent reputation, and has very reasonable rates.

Mario Herman's column is syndicated to Blue MauMau by permission of the author. His insights and information are also available at franchise-law, and International Franchise Law.

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Franchise Operations