12 Points of Fair Franchising

Many franchisees ask our franchise law firm what agreement provisions are fair for the franchisee. Some even wonder if any franchise agreement is fair. One way to to assess your franchise agreement, Federal Disclosure Document and other franchise related documentation is to attend or review the reports put out by the AAHOA (Asian Americans Hotel Owner Associatioon). The AAHOA puts out a performance appraisal report (PAR) that compares five leading franchise companies by determining how they measure up to its 12 Points of Fair Franchising. While the organization looks at franchisors in the hotel industry, its report can provide some insight for any franchisee. For example, according to this article, the Wyndham Hotel Group has liquidated damages clauses in its franchise agreements which generally amount to $2,000 per guest room, or 24 months of fees even though the AAHOA states that franchisees should only have to pay six months of royalty fees.