Amendments do happen and can be needed for various reasons; a franchisee has trouble finding a site and needs more time or they may be adding an entity. Make sure that you run all amendments through our team so that we appropriately attach them to the franchise agreement. You should have transparency and we need to have access to the agreed upon changes to the franchise agreement and you should always have proper recording of any changes. An agreement is incomplete if you create it and proceed without our knowledge.
Why is this important? For example, when you are ready to sell the business, and the potential buyer is going through due diligence, they could find amendments that aren’t in the file. This puts the integrity of the agreement in question. If something is missing, the question becomes, “What else is missing?”.
When a franchisee asks for an amendment, even though we’re not obligated to fulfill their request, when we do make a change, we want to take the opportunity to add into the amendment a release statement that the franchisee has no claim or issue with you, the franchisor. This eliminates any uncertainty regarding the intention of the request.
Depending on the requests, it’s also a possibility that the change might become an update that could become permanent for future updated FDD and/or agreements. Therefore, even though you might not accept the change, all requests should still be discussed with your Spadea Lignana team to maintain the ability to strengthen your next year’s documents.