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Does a franchisee have to honor sales?

On Behalf of | Apr 12, 2022 | Franchise Law |

franchise honor sales

 

If you started a franchise, you’ve agreed to run your business in a certain way. You sell specific products that you get from a certain supplier, your business looks similar to the other ones in the franchise and one of the benefits to you is that you get free advertising when the franchisor puts those ads together.

But what if an ad comes out saying that a certain item will be on sale at franchise locations? Do you have to honor that sale or can you determine that your store isn’t going to be involved?

Only at participating locations

If you have seen commercials for different sales at franchise locations, you may have heard the line about how these deals are “only available at participating locations.” The reason for this is that the franchisees still get to control their prices and cannot be told they have to offer any sort of a special or have a specific minimum price.

So, in theory, you would not have to honor that sale if you did not want to do so. Most franchise locations will go along with the national sales and pricing structures, with the goal of giving customers what they expect, and the franchisor can suggest a retail price for all of the products. But it is still up to you if you want to sell your products for that price or if you’d like to charge a different amount.

Starting a franchise can be very lucrative, but it can also be complicated because you have to figure out exactly what rules you’ll need to follow, and this can be much different than starting your own company. Be sure that you know exactly what legal obligations you have and what steps to take if you’re starting a franchise.

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