Commission approves proposed franchise agreement for chain of pizza and sandwich restaurant-carryout shops

No. 278. Commission approves proposed franchise agreement for chain of pizza and sandwich restaurant-carryout shops. The Commission issued an advisory opinion approving a pro- ADVISORY OPINION DIGESTS 1661 posed franchise agreement between a trademark-trade name owner and individual operators of pizza and sandwich restaurantcarry-out shops. Some of the important provisions of the agreement are the following:

1. Either the licensee or the licensor may submit to arbitration any question concerning agreement termination rights and obligations, including return to the licensee of all or any portion of the initial fee.

2. Licensor must make available for sale to licensee the foods paper products and supplies necessary for conducting the business but licensee is not required to purchase them from licensor. 3. Licensor wil1 prepare and place advertising directed to ultimate consumers in the general area of licensee s shop; licensee wm provide the funds for such advertising; licensor will give licensee a quarterly accounting of the use of such funds. 4. Licensor may direct information other than price to go into signs and advertising.

5. The food sold and service provided must meet standards of quality set by licensor.

6. Licensee is not to operate a similar business for 2 years after termination of the agreement within 2 miles of his former shop. (File No. 6837150, released Aug. 23 1968.