Franchise (Franchise Agreement)
Obligations of Franchisees
Obligations of franchisees
- A franchisee shall fulfill the following obligations in his/her sales activities (Article 6 of the 「Fair Transactions in Franchise Business Act」).
A) Endeavor to maintain the integrity of the franchise business and the reputation of the franchiser
B) Maintain inventory at a proper level to meet the supply plan of the franchiser and consumer demand, and to display commodities for that purpose
C) Meet appropriate quality standards that the franchiser requires for commodities or services
D) Use commodities or services provided by the franchiser if it is impossible to purchase commodities or services otherwise that meet the quality standards as per C) stated above
E) Meet appropriate standards that the franchiser requires with respect to facilities and the exterior of the place of business or means of transport
F) Consult with the franchiser in advance when intending to change commodities, services, or business activities
G) Maintain and provide data necessary to establish strategies for the integrated management and sales activities of the franchiser, such as accounting books related to the purchase and sale of commodities or services
H) Allow executive officers, employees, and other agents of the franchiser to enter the franchisee's place of business to inspect and record the current status of business of the franchisee or data under G) stated above
I) Refrain from relocating the place of business or transferring the franchise license to any third party without the consent of the franchiser
J) Refrain from engaging in the same type of business as that of the franchiser during the term of the franchise agreement
K) Refrain from divulging business knowhow or trade secrets of the franchiser
L) Notify the franchiser of any infringement of business marks and provide appropriate cooperation as necessary to prevent infringement where a third party's infringement of business marks is discovered