A Franchise Agreement is the most vital document in a franchising relationship. A Franchise Agreement is a legally binding contract between a franchisee and franchisor and is generally in place for many years.
The Agreement sets out the franchisee’s, and franchisor’s, responsibilities and rights and includes information about what fees the franchisee must pay, what the terms of the agreement are, what restrictions apply to using the franchisor’s branding and other intellectual property, what rules must be followed, if there are marketing or promotional requirements the franchisee must participate in, when the agreement can be terminated, and a mechanism to resolve disputes that may arise.
Generally, a franchisee is given a minimum of 14 days to review the Agreement.
We strongly recommend anyone considering buying a franchise use this time to get advice from an experienced commercial lawyer and accountant before signing the agreement.