Communities negotiate franchise agreements with utility companies to identify the conditions under which those companies are allowed to use public property to provide service to local residents and businesses. Utility companies pay a fee to the cities — negotiated through a franchise agreement — in exchange for use of the public right of way.
When does the OG&E contract end?
Do franchise agreements have to go to a vote?
Do public utilities have to have a franchise?
Do cities charge franchise fees?
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What are the four types of franchise agreements?
Below are four types of agreements franchised businesses commonly form.Single-Unit Franchise Agreement. In a single-unit agreement, the arrangement grants the franchisee the right to open and operate a single franchise unit. ... Multi-Unit Franchise Agreement. ... Area Development Franchise Agreement. ... Master Franchise Agreement.
What are 5 things that may be included in a franchise agreement?
Franchise agreements vary between different franchises, but these seven areas should be addressed in every franchise agreement.Use of Trademarks.Location of the Franchise.Term of the Franchise.Franchisee's Fees and Other Payments.Obligations and Duties of the Franchisor.Restriction on Goods and Services Offered.More items...
What are the three types of franchise agreements?
When it comes to structuring franchise arrangements, there are typically three different types of franchisor and franchisee agreements.Single-Unit Franchise Agreement. ... Area Development Agreement. ... Master Franchise Agreement.
What should be included in the franchise agreement?
Key points in a franchise agreementThe identity of the franchisor and the franchisee.The duration of the franchise, and any renewal rights.The fee structure.How the business is to be marketed.The operating requirements of the business (linking directly with the Operations Manual)Legal and regulatory compliance.More items...
How long is a typical franchise agreement?
between five and 20 yearsThe typical length of a franchise agreement is between five and 20 years. A common reason for this general length of time is often the size of the franchisee's initial investment, though market conditions and the type of franchise can also be factors.
What advice would you offer before signing the franchise contract?
Before signing the franchise agreement, you should take a close look at the royalty fees and see what you get in return for the royalties you pay. Not all franchises are created equal, and not all royalty structures are the same.
What is the most common type of franchise agreement?
single unit franchiseA single unit franchise is an agreement where the franchisor grants a franchisee the right to open and operate one franchise location. This is the most common and simple type of franchise relationship.
How do you negotiate a franchise agreement?
8 Things to Consider When Negotiating a Franchise AgreementFirst of all, never sign any agreement without negotiating. ... Negotiate extensions. ... Your right to obtain waivers in the event of the franchisor's company-wide decisions. ... Make sure that all fees are disclosed. ... Have as few requested changes as possible.More items...•
What are the advantages of franchising?
Advantages of buying a franchise You don't necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model. Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise.
What is an average franchise fee?
Franchise fees are typically between $25,000 to $50,000 on average. 2) Startup Costs: These are the expenses you'll incur to get your new business open and operating. Initial investment costs vary widely from franchise to franchise.
What is the most important key subject in the franchise agreement?
Trademark and intellectual property One of the most important elements of a franchise agreement is the right to use the franchisor's trademark. The franchisor must register the trademark and have the exclusive right to use it.
What happens at the end of a franchise agreement?
When your franchise agreement expires, it is incumbent on a franchisee to immediately cease all franchise operations. This means: De-identification: The franchisee must stop using the franchisor's trade name and trademarks. This involves removing any signage from your place of business.
What are the five factors you should study before getting into franchising?
So before you decide if it's right for you, here are 6 factors you should consider before buying a franchise.Demand. As is the case before starting any new business, find out if there is a demand for the product or service you intend to offer. ... Track Record. ... Investment. ... Competition. ... Training. ... Restrictions.
What are the basic requirements of the franchise Rule?
The Rule requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, its officers, and other franchisees.
What is the most important key subject in the franchise agreement?
Trademark and intellectual property One of the most important elements of a franchise agreement is the right to use the franchisor's trademark. The franchisor must register the trademark and have the exclusive right to use it.
What is included in a franchise disclosure document?
A Franchise Disclosure Document includes 23 specific pieces of information (called items), the franchisors franchise agreement, and various exhibits (like a list of current and past franchisees, and audit financials of the franchisor.
Franchise and Public Utilities - Maryland Department of Assessments and ...
Contact Us Public Utility & Franchise Tax Unit 301 West Preston Street Baltimore, Maryland 21201 410-767-1940 (voicemail only)
American Public Works Association Utility and Public Right-of ... - APWA
standard ROW permit process. Under this argument, the issue of franchise fees and other types of control may rest more with the property owners than with the local municipality.
Franchise Utilities Definition | Law Insider
Related to Franchise Utilities. Franchise Area means the area within the jurisdictional boundaries of the City, including any areas annexed by the City during the term of this Franchise.. Water utility means a public utility as defined in. Franchise Fee means a direct or indirect payment to purchase or operate a franchise. Franchise fee does not include any of the following:
Colorado General Assembly
Colorado General Assembly
What is a franchise agreement?
Simply put, a franchise agreement is the legally binding document drawn up between a franchisor (the company that owns the brand/system of doing business) and the franchisee (the person who is buying into the franchise).
What does a franchise agreement include?
The most typical franchise agreements are single and multi unit, and they will usually include variations on these clauses:
How do you draft a franchise agreement?
While there are franchise agreement advantages disadvantages, one good thing about them is that many of the parts of the franchise agreement are negotiable. Another thing is that you probably won’t have to come up with one on your own.
Why use franchise fee revenue?
In recent years, cities have considered using utility franchise fee revenue for activities to reduce energy use and promote renewable energy.
How many states allow franchise fees?
The map shows states where cities can have franchise fees and whether they have the authority to set the fee.The updated map below shows data for all states, concluding that franchise fees are allowed in 45 states. Franchise fees can be set at the city level in 40 states, at the state level in 5 states, and are prohibited in 5 states.
Does Ann Arbor have a franchise agreement?
The 2009 study also noted that only one city (of those studied)––Ann Arbor, Mich.––had a franchise agreement including provisions for renewable energy. In particular, the franchise required the utility to provide at least 10% renewable energy by the fifth and final year of the contract. ILSR was unable to find an example franchise agreement from any other city with a similar provision. Unfortunately, fees charged by monopoly utilities on third parties and changes to Michigan state law invalidated Ann Arbor’s franchise agreement, and no fees have been collected in several years.
Is Minneapolis a franchise?
Minneapolis, Minn., stands out as the most innovative user of the franchise fee in recent years. As its existing franchise contract with private, monopoly electric and gas companies Xcel Energy and Centerpoint Energy wound down in 2013, the city began an exploration of its legal options to accomplish Climate Action and local energy goals. In an “Energy Pathways” study ( summary slideshow ), the city explored the leverage of forming its own, city-owned utility (testing the sway of the “birch rod,” as President Franklin D. Roosevelt famously called the flexing of local authority in his 1932 “Portland Speech”).
How to expand access to money upfront for energy improvements?
Expand access to money upfront for energy improvements by reducing perceived lender risk with inclusive financing mechanisms, such as a loan-loss reserve or loan interest-rate buydown.
Do cities in the teal blue have franchise fees?
States in the teal blue do not allow cities to manage their own franchise agreements, and the fee is set at the state level. Lastly, states in the dark orange do not allow franchise fees but do allow cities to manage their own franchise agreements.
Can a state limit the power of localities to pursue such goals via a franchise?
States may limit the power of localities to pursue such goals via a franchise, however. When Minneapolis negotiated its franchise contract renewals in 2014, for example, state law precluded including similar requirements in the contract.
What should a utility franchise include?
A well-crafted franchise should include clauses covering all of the practical issues that arise when multiple utilities are sharing a common corridor. If you rarely see or hear of utility franchising problems in your jurisdiction, that could indicate that your local officials and staff are handling these issues well.
What is a franchise in a business?
A franchise typically covers a wide range of topics, such as permitting procedures, notice requirements before digging in the ROWs, insurance and indemnification, length of the franchise, and any applicable costs, fees, or tax arrangements.
When does the OG&E contract end?
OG&E’s agreement with the city ends December 2018, and the company is asking for the city council to put a renewal vote on an upcoming ballot.
Do franchise agreements have to go to a vote?
Under the Oklahoma Constitution, franchise agreements also are required to go to a vote of the people , Walker said. This can happen if a city council puts the agreement on a ballot or calls a special election, or, Walker said, there is a citizen-driven petition to put it on a ballot.
Do public utilities have to have a franchise?
This type of agreement is common, as a public utility must have a franchise before it can use streets or public grounds to operate, Walker said.
Do cities charge franchise fees?
Cities charge utilities a franchise fee as a type of rent, since the companies use public streets, said Shawn O’Leary, Norman public works director.
