Fourth, there will be a monitoring and auditing clause in the contract. This may be
spelled out explicitly, but will usually give the franchisor arbitrary and discretionary
power. Fifth, the contract will have a termination clause. The termination clause
will heavily favour the franchisor who can practically end at will. The franchisee, on
the other hand, also can terminate, but at unfavourable terms, usually incurring a
heavy penalty. Finally, the contract will contain miscellaneous clauses dealing with
sale of the franchise, rights of heirs, territorial rest Second, the franchisee agrees to operate the business in the manner stipulated
by the franchisor. This includes hours of operation, pricing scheme, inventory levels,
and adherence to the operating manual ñ if one is supplied. Third, the franchisee
agrees to pay royalties to the franchisor. This is usually in the form of a non-linear
outlay schedule, comprised of a Öxed fee plus a share of the revenues.
Fourth, there will be a monitoring and auditing clause in the contract. This