Property Negotiations in Franchising

In common usage, property is a societal convention that means "one's own thing" and refers to the relationship between individuals (or groups) and the objects which they control and dispense with as they choose. Scholars in the social sciences frequently conceive of property as a bundle of rights. They stress that property is not a relationship between people and things, but a relationship between people with regard to things. Property is often conceptualized as the rights of 'ownership' as defined in law. Private property is that which belongs to an individual or a group of individuals (often in the form of individual tradable shares); public property is that which belongs to a whole community collectively or a State.

Outside of common usage the concept of 'property' or 'ownership' has no single or universally accepted definition. Various scholarly communities (e.g., law, economics, anthropology, sociology) may treat the concept more systematically, but their definitions likewise vary within and between fields.

In the broadest and simplest sense, spanning history and cultures around the world, property may be defined as the fruits of creative work. It is almost universally accepted that artwork belongs to the artist, or literature belongs to its author, or an invention belongs to its inventor. From this comes most, if not all, ancient and modern notions of property rights.

Modern property rights conceive of ownership and possession as belonging to legal individuals, even if the legal individual is not a real person. Thus, corporations, governments and other collective forms of ownership are framed in terms of individual ownership. Exceptions to this pattern include the "commons", which belong to a defined community, and the "public domain", to which access is unlimited.

If your targeted franchise is going to operate from retail or office premises you will need to identify the appropriate location for those premises and negotiate the lease.  When considering a franchise establish whether the franchisor assists in locating suitable premises, as obviously they have a better knowledge of the ideal locations and will probably have contacts with agents that can help in your search.

There are two main scenarios that will arise in relation to the premises to be used for a franchise.  Either the franchisor will take the lease of the premises and sublease them to the franchisee; alternatively, the franchisee may be left to take a lease directly with the landlord, or sub-landlord, of the premises, sometimes subject to the franchisor being granted certain rights in connection with the lease. In either of these scenarios there are traps for the unwary:

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