Controls

To ensure uniformity, franchisors typically control how franchisees conduct business. These controls may significantly restrict your ability to exercise your own business judgment. The following are typical examples of such controls.

· site approval.

· design or appearance standards.

· restrictions on goods and services offered for sale.

· restrictions on method of operation.

· restrictions of sales area.

1. The franchisor also may require you to purchase supplies only from an approved supplier, even if you can buy similar goods elsewhere at a lower cost.

2. While these territorial restrictions may ensure that other franchisees will not compete with you for the same customers, they could impede your ability to open additional outlets or move to a more profitable location.

3. Many franchisors pre-approve sites for outlets.

4. Franchisors may limit your business to a specific territory.

5. Similarly, as an automobile transmission repair franchise owner, you might not be able to perform other types of automotive work, such as brake or electrical system repairs.

6. This may increase the likelihood that your outlet will attract customers.

7. Franchisors may restrict the goods and services offered for sale.

8. The franchisor, however, may not approve the site you want.

9. Franchisors may impose design or appearance standards to ensure customers receive the same quality of goods and services in each outlet.

10. Complying with these standards may increase your costs.

11. Franchisors may require you to operate in a particular manner.

12. The franchisor might require you to operate during certain hours, use only pre-approved signs, employee uniforms, and advertisements, or abide by certain accounting or bookkeeping procedures.

13. Some franchisors require periodic renovations or seasonal design changes.

14. These restrictions may impede you from operating your outlet as you deem best.

15. For example, as a restaurant franchise owner, you may not be able to add to your menu popular items or delete items that are unpopular.