The franchise agreement is a legal document between a franchisor and franchisee to open and operate a franchise unit. Franchise agreements greatly vary based on the franchisor.

• Franchisor & Franchisee Details

Before entering into the franchise agreement, the details of the franchisor and franchisee are entered. In most cases, the franchise agreement executes between two companies or legal entities.

• Franchise Fee & Consideration

Terms of the franchise fee, deposit, royalties, advertising fees, and other charges are discussed in length in a separate section.

• Business Operations

The biggest benefit of a franchise is that the franchisor would help with the operation of the franchise unit based on their past experience and expertise.

• Advertising and Brand Promotion

The responsibility of the franchisor towards promotional spending for franchisees and the requirement of the franchisee to contribute to brand building activities is mentioned clearly in the franchise agreement.

• Training, Supervision, and Support

Franchisors provide the necessary training, supervision, and support to franchisee units for a certain amount of time or on a regular basis.

• Use of Trademark & Intellectual Property

One of the most important elements in a franchise agreement is the right to use of trademarks of the franchisor. The franchisor must have registered the trademark and have exclusive rights for use of a trademark.

• Term of Agreement

The franchise agreement must clearly state the terms of the agreement, length of the agreement, provision for renewal, and the effect of termination of the franchise agreement.

• Transfer or Assignment of Franchise

Most franchise agreements explicitly require the franchisee to obtain the approval of the franchisor for transfer or assignment of interest in the franchise unit.

• Termination of Franchise Agreement

The franchise agreement contains detailed provisions for termination of the agreement in case of failure of either party in the agreement to perform as per the agreement.

• Governing Law and Dispute Resolution

It is a good practice to mention the governing laws and jurisdiction for the operation of the franchise agreement.

• Do you need help?

Do you also want to have a perfect Franchise Agreement? Do you need our help? You too can take a step forward. Contact us for more information.

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