a franchise agreement sample also contains an outline of the obligations of both the franchisor and the franchisee. in a franchise agreement, the entity who owns the franchise or the “franchisor” grants the other entity or the “franchisee” the right to make use of the proprietary marks and system to operate the business or franchise. the franchise contract must also specify the amount of the fee the franchisee must pay. before signing, the franchisee must understand everything written on the document including any restrictions and provisions stated therein. a lot of times, people confuse franchise agreements with license agreements.

if you plan to license your business for use as a franchise, you must have a franchise agreement to operate legally and successfully. the idea behind a franchise is to help you make a tremendous amount of money and gain brand recognition. the parties involved in a franchise agreement are the franchisor and franchisee. we may require you to open a second standard office or kiosk as part of the business improvement plan. you expressly acknowledge and agree that we can operate or grant a license to others to operate a franchised business at any location outside the territory.

the franchise agreement is a fairly one-sided contract that is prepared with great forethought by the franchisor’s lawyers. a good franchise attorney is able to help the franchise client fully understand the document and the terms therein. one of the more commonly overlooked elements of the franchise agreement is the termination clause. a franchise agreement is much like a pre-nuptials agreement between a married couple.

[1] clauses in the franchise agreement will stipulate grounds for termination, remedies against termination, and the process by either the franchisee or franchisor to start termination. a franchisor that is practicing franchise fraud will typically use a franchise termination process that was not disclosed in the franchise agreement, uniform franchise offering circular, or franchise disclosure document. the frivolous litigation threat can include claims of unpaid royalties, such as computer license fees, and unpaid future royalties and fees, which were not specified, or agreed to, in the original franchise agreement.

a franchisor can terminate the contract if a franchisee: once you have decided to terminate your franchise agreement, you and your lawyer must write a letter and request the termination in writing. the letter must detail your intention to terminate the contract and close the franchise and be sent to the franchisor. understanding your rights and obligations under the franchise agreement is crucial if you`re looking for a way out of a bad franchise deal. important note: if your franchise agreement is terminated by mutual agreement with your franchisor, the franchisee must continue to consider his obligations to his landlord under his lease. talk to an experienced business lawyer before attempting to terminate your franchise agreement.