Franchise Agreement

What a Franchise Agreement Is

The franchise agreement is the binding contract between the franchisor and franchisee. Once signed, it outlines the legal rights, responsibilities, and obligations of both parties for the entire term of the relationship.

What the Agreement Typically Includes

Most franchise agreements cover:

• Length of the agreement (usually 5–20 years)

• Fees and payments

• Territory rights

• Training and support obligations

• Operational standards and requirements

• Marketing and advertising contributions

• Renewal, resale, and termination rights

• Use of trademarks and intellectual property

Why the Franchise Agreement Is Important

Once signed, this agreement governs every aspect of how your franchise must operate. It clearly defines what you can expect from the franchisor and what they expect from you. Breaking the agreement can result in penalties or termination.

What You Should Do Before Signing

Most prospective franchisees hire a franchise attorney to review the agreement. Attorneys often look for:

• Burdensome obligations

• One-sided termination rights

• Unusual fees

• Lack of clarity around territories

• Restrictions on resale or renewal

Understanding the terms up front can save time, money, and stress later.

Legal Disclaimer

The information provided here is not legal advice. Always consult a franchise attorney before signing any franchise agreement.