Govind Fast Foods is doing good business and has garnered acceptability among its clients. It is contemplating to open fast-food chain along Delhi-Jaipur highway and enter into a franchise with Subway, a fast-food franch

Franchising refers to the methods of practicing and using another person's business philosophy. The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee. Govind fast foods will have the advantage of starting up a new business quickly based on a proven trademark and formula of doing business of Subway. It may be able to take businesses to a level which it would not have been possible without the expert guidance from Subway. Govind fast foods may also receive significant training from Subway. Govind fast foods is also required to take note of constraints. There is no guarantee of improved financial performance. Moreover, there is loss of control as it would have to follow the use of a system, trademarks, assistance, training and marketing of Subway. Further, franchise agreements are unilateral contracts or contracts of adhesion wherein generally the contract terms are advantages for the franchiser when there is a conflict in the relationship.