What is franchise agreement?

A franchise agreement is a contract under which the franchisor grants the franchisee the right to operate a business, or offer, sell, or distribute goods or services identified or associated with the franchisor’s trademark.

What is the simple definition of franchise?

A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.

Why is franchise agreement important?

This document legally forges the relationship between a franchisor and a franchisee. Without it, a lot of business-related threats, mishaps, and breaches could be committed both intentionally and inadvertently by all parties involved. The franchise agreement is what defines and details the franchise relationship.

Are franchise agreements negotiable?

Yes, franchise agreements are negotiable.

How does franchise work?

In franchising, a franchise owner partners with a corporate brand to open a business under the brand’s umbrella. The franchisee owns and operates that location using the franchisor’s brand name, logo, products, services and other assets.

How do you get out of a franchise agreement?

Once you determine to terminate your franchise agreement, you and your attorney must draft a letter and request termination in writing. The letter should detail your intention to terminate the agreement and close the franchise and be sent to the franchisor.

What happens if you want to cancel a franchise agreement?

What happens when a franchise agreement expires?

When your franchise agreement expires, it is incumbent on a franchisee to immediately cease all franchise operations. This means: De-identification: The franchisee must stop using the franchisor’s trade name and trademarks. This involves removing any signage from your place of business.