Unilateral variation
What it means
A franchise agreement is a contract, and normally both parties must agree to change it. A unilateral variation is a change imposed by one side alone. The Franchising Code limits a franchisor's ability to vary an agreement unilaterally, and prohibits retrospective changes that reach back and alter terms that already applied.
This matters because franchise agreements often run five to seven years or longer, over that time a franchisor with an unchecked power to change the deal could erode the value of what you bought.
In practice
Read the variation clause before signing. If the agreement lets the franchisor change fees, territory or obligations at will, have your lawyer explain the limits the Code places on that power and negotiate where you can.
A real example
Two years in, a franchisor tries to increase the royalty rate for all existing franchisees by amending the manual. Because this is a retrospective, unilateral change to a core financial term, the franchisees challenge it as inconsistent with the Code.
Unilateral variation, FAQs
Can a franchisor change my agreement without my consent?
Only within limits. The Franchising Code restricts unilateral variation and prohibits retrospective changes. Many operational details sit in the operations manual, which can change, so check what your agreement lets the franchisor vary.
Are retrospective changes to a franchise agreement allowed?
No. The Code prohibits retrospective variation, a franchisor cannot change terms in a way that applies to a period before the change.
See the full franchise glossary, the Fee Index or our buyer guides.