What is a Franchise Agreement:
A franchise agreement is a contract, which is entered into between the franchisor, and the franchise and sets out the relationship between the franchisor and franchisee. The franchise agreement will usually appear biased towards the franchisor, which is necessary for the franchisor to maintain control over the franchise system.
A franchisor is risking its name and reputation on the franchisee’s performance, so it is only fair and reasonable that bit has the right to place certain obligations on the franchise. Consistency among franchise units is a cornerstone of successful franchising – and consistency requires compliance.
Why You Need Your Customized Franchise Agreement:
Despite common beliefs, there is no such thing as a standard franchise agreement, and no two franchise agreements are alike. This is understandable because franchises cover many types of business in many different industries and have different characteristics.
A franchise agreement will be just one of the documents that a franchisee will be required to sign. These may include a non-disclosure/confidentiality agreement, offer to purchase agreement, lease (or sublease) agreement, and a security agreement.