Franchise Agreement

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A franchise agreement is a legally binding contract between Franchisor and Franchisee. Thus a franchise agreement grants a franchisee the right to use the franchisor's system, proprietary marks to operate a franchised business. Thus franchise agreement in which the franchisor lends the trade name or business system to other person/entity.

The contract shall define the brand name that will be used, the length of franchise agreement, clauses dealing with penal provisions, ranging from fines, compensation, cancellation of the franchise. The Indian franchising industry has seen vigorous development over the previous decade. In spite of the financial subsidence, the yearly development rate of the franchising business in India has stayed positive and is as of now pegged at 30%-35%.

Advantages of Franchise Agreement

A franchise agreement allows one to access to the trademarked business logo, the products and all of the marketing expertise that a franchise has to offer. The advantage to a franchise agreement is that it legally allows the person/entity to use a known trademarked business name and logo as part of business plan.

The franchiser after entering into the contract shall be able to specify the terms and conditions of the usage of brand, penalties and rules and regulations are clearly defined.

Procedure of Franchise Agreement?

  • A well efficient lawyer from our team shall contact you, and explain you the total process, and will understand the need of Franchise Agreement to be executed by you.
  • Once the objectives of the same are clear, the lawyer shall draft a sample Franchise Agreement accordingly.
  • The draft Franchise Agreement shall be sent to you, for your review.
  • The whole process takes around 3-4 working days.


'Quality' of franchise agreement is surveyed on various parameters including: clearness in the specified reason, comprehensive/loophole free character, unambiguous.

'Quality' accepts significantly more important in a franchise arrangement because of the inalienable business and operational complexities in such arrangements. A quality franchise agreement must effectuate the hidden cooperative connection between the Franchiser and the franchisee.

The franchise agreement is a contract between the franchisor & the franchisee. Before signing the franchise agreement it is mandatory to go through the FDD i.e. Franchise Disclosure Document. FDD gives clear data about what one could anticipate from the settlement, the franchisor and the franchisee's name, the sort of franchise that is being purchased, details regarding past execution of the franchisor with the project, the region, promoting and publicizing strategies and the sort of help that would be reached out to the franchisee and other important data as well.

There are few aspects in the franchise agreement that you have to give more concentration up on. The underlying expenses, the franchisee's commitments, litigation's, franchisor's commitments and income claims are few such aspects. You must learn about the financial performance of the business to get a clear picture by this document. A good franchise agreement will contain all these and numerous more which will make your relationship with the franchisor a transparent one.