The top portion of the franchise agreement format covers the parties involved in the agreement as well as the franchise fees that the person/company (to whom the franchise is being licensed to) agrees to pay.
This franchise agreement governs [Client.FirstName] [Client.LastName] ’s license to operate an authorized franchise location under the franchise company umbrella. The agreement is valid as of the agreement date and lasts for a period of agreed-upon years.
A franchise is a type of retail operation in which an organization’s brand is sold to a representative entity and that entity is given the authority to promote the merchandise or services of the organization’s business within a specific region. When the franchisor (grantor) gives the franchisee (grantee) a license to operate a business under their brand name, this means that the franchise has been granted
This franchise has been granted to the Franchisee. In accordance with this, the Franchisor hereby provides the Franchisee with the exclusive right to employ the Marks and Licensed Methods in association with the formation and operation of the franchise at the site indicated in this agreement, which the Franchisee accepts from the Franchisor in writing. The Franchisee undertakes to utilize the allotted trademarks and Licensed Methods in conformity with the terms and conditions of this agreement. These conditions may be amended, modified, or even further extended and elaborated as per requirements by the Franchisor at regular time intervals with prior notice.
Use this space to insert details about the contracting parties engaging in a legally binding agreement with one another. Because franchise company models differ in structure as well as the aims and ambitions of the franchisor, the template below may not be applicable to all forms of ownership models. For example, after conducting an extensive study on the franchise ownership model you are considering, as well as an objective review of your individual strengths, shortcomings, and economic ability, select the franchise ownership model that is best for you and modify the template appropriately. In the space below, fill in the details of the franchise operator(s) and the agreement parties.
[Client.City] , [Client.State] , [Client.PostalCode]
[Sender.City] , [Sender.State] , [Sender.PostalCode]
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The Grantee, in this case, the entity purchasing the franchise, shall pay to Grantor (Owner of the franchise and its rights) a franchise fee determined by the provisions of this section. It is recognized that the Grantee has or will effectively enter into a franchise agreement(s) with the Grantor with fee provisions similar to this one, and that the total yearly Franchisor’s Fee will be calculated based on the gross sales occurring during each year within jurisdictions the Grantee operates in.
The Grantee is responsible to declare, annually, the gross sales the franchise generates in intervals as per the terms of this agreement (Declaration of Gross Revenues). This declaration is required not only for any Franchisor’s Fees listed above, but as stipulated for any other Franchisor rights, royalties, and as required by law for local and/or federal tax purposes not otherwise stated herein.
In addition, the Grantee shall remain responsible for paying to the local jurisdictions (city, county, state, etc., as appropriate), throughout the length of this agreement, the:
Taxes (State, City, and Federal) Licensing Fee Fee for permissions to use the City's Rights-of-Way Maintenance Fee Marketing Fee Any fees/costs arising from conducting or advertising the businessIn its sole and absolute discretion, the Franchise owner may raise the National Marketing Fee up to a maximum amount of 3% of Gross Revenue generated with at least four months written notice beforehand.
Description of first item
Description of second item
Description of third item
This section of the template outlines the responsibilities of the brand and the location owner.
[Client.LastName] [Client.FirstName] will ensure that the location adheres to established franchise guidelines for appearance and cleanliness.
Unless otherwise specified in this Contract, Franchisee's Company shall be the sole (Company X) office operating within the established geographical territory agreed upon. So long as Licensee is not in violation of this Agreement, the Franchise Owner will not establish or operate a competitor (X) office in the same Territory, whether corporate or licensed. There must, however, be no territorial constraints on where clients may originate from, for whatever Company office, whether company-owned or franchised. Except in pursuance of this Agreement and the Guidelines, Franchisee shall not broadcast any form of media advertising or otherwise promote outside of the Franchisee's determined region.
[Client.FirstName] [Client.LastName] agrees to provide all necessary documentation and materials needed to meet the requirements of the franchise location.
[Client.FirstName] [Client.LastName] agrees to oversee the daily management and operation of said franchise location and employees.
[Client.FirstName] [Client.LastName] is also in agreement to maintain all upkeep of said location.
[Client.FirstName] [Client.LastName] agrees to pay the franchise for the rights to own and operate this franchise location. The payment amount is shown in the table above and includes any deposits, discounts, and taxes related to the said amount.
[Client.FirstName] [Client.LastName] also agrees to pay the Franchisor royalties up to (Dollar.Amount) on a monthly basis as agreed upon by both parties. Failure to pay any royalties and/or fees within the agreed time period may result in termination, seizure or withdrawal of [Client.FirstName] [Client.LastName] ’s franchise license.
Any and all failure to apply with the terms and conditions set forth may result in termination of the agreement, and further legal action as deemed necessary by [Sender.FirstName] [Sender.LastName] .
The company is currently in good standing under all laws and has all requisite power and authority to enter into this agreement with the owner.
To the owner's current knowledge there are no legal matters or personal matters that will prohibit them from fulfilling this contract's term.
Company will provide needed support as listed below for [Client.FirstName] [Client.LastName] as agreed to in this Franchise Agreement.
[Sender.FirstName] [Sender.LastName] has the right to inspect the location upon notice no sooner than (Number) days before any inspection.
Use the table in the template below to detail any advertising or promotion assets that will be provided to the franchise owner.
[Client.FirstName] [Client.LastName] will conduct and maintain all independent advertising and will pay an annual marketing fee to [Sender.FirstName] [Sender.LastName] as payment for any National or International advertising required for overall franchise operation.
[Sender.FirstName] [Sender.LastName] will be invoiced monthly for above-mentioned advertising.
The company will provide and maintain all signage, products, etc, necessary for location promotions or branding.
Within (Number) months of beginning operation, the Franchisee must publicize and hold an official launch in conformity with the Franchisor's rules. The official launch must be acceptable for the district, locale, neighborhood, market climate, and other comparable elements of the Franchisee.
The following items have been found necessary for the success of the Franchise. Additional items must be requested no later than 3 days from the purchase date.
Any and all trademarks and any copyrights belonging to the Franchise will remain [Sender.FirstName] [Sender.LastName] ’s sole intellectual property at all times.
[Client.FirstName] [Client.LastName] will have limited and non-exclusive rights for use of said trademarks and copyrights for the sole purposes of advertising and promotion. Any misuse of the Company’s trademarks or copyrights will result in contract termination and legal action.
The Grantee shall not assign the Franchise granted herein except by operation of law or to an entity controlling, administered by, or even under contract arrangements with the Grantor, without the previous agreement of the Grantor, which allows implementation not to be unreasonably withheld or delayed.
However, no such approval is necessary for a transaction in trust, by lien, by other hypothecation, or by assignment of the Grantee's rights, title, or interest in the Franchise’s name to secure debts. Within thirty (30) days after receiving a release clause, the Grantor shall advise the Grantee in writing of any additional information reasonably required to evaluate the transferee's juridical, economic, and technological abilities.
[Client.FirstName] [Client.LastName] may sell or transfer the Franchise with prior written and approved notice from the Franchisor. The Franchisor has the right to deny any selling or transferring of ownership of the franchise location for any reason.
All confidential information exchanged between Franchisor and Franchisee shall be labeled and clearly marked as confidential.
Both parties agree that they will undertake reasonable effort to not share or disclose this information with any third parties, until and unless, the said third party needs it for legal purposes, or already has knowledge of the information.
Information that is out and open to the public is not classified as confidential information.
Both parties agree that regardless of whether any information is specifically marked as confidential, or if it has been formally shared with them, as long as it can be classified as sensitive or personal information, or information that might ruin the other party’s reputation, will not be shared.
These sections cover the processes for renewing or terminating the franchise agreement, along with terms governing severability and jurisdiction.
This Franchise Agreement will be renewed as of the renewal date. Both parties will have options to renew or cancel this Franchise Agreement at said date. Failure to comply with any and all terms of this agreement made by the Franchisee will result in termination of the agreement in its entirety.
As a result, [Client.FirstName] [Client.LastName] will agree to give up all rights to use the Franchise’s intellectual property at the location listed in this Franchise Agreement, including intellectual property such as logos and signage.
According to the Franchisor's Right to Audit, the Franchisor, and/or its agents or representatives shall have the right to investigate and audit, or potentially trigger to be thoroughly checked and audited, the financial records, record keeping and financial reporting records, computer database systems, tax information and other documentation of the outlet and of licensor, and the public records of franchisee if it is a corporate entity, limited liability company, or perhaps other commercial entity.
Such audits can occur at any period during office hours even without previous intimation to the distributor. Any such examination or review must be conducted with the Franchisee's complete cooperation. If any review or audit reveals an underestimation of the outlet's gross sales, dietary products overall receivables, or F&B gross receipts, or nonpayment of any charges or other obligations owed under the agreement, the agreement will be dissolved.
Any terms found unenforceable will have the option to be replaced as deemed necessary. The exclusion of the above-mentioned terms will in no way affect any other portions of this agreement. Both parties are in agreement any and all disagreements pertaining to this Franchise Agreement shall take place in [Sender.Country] , [Sender.State] .
This agreement will come “Into Term” upon the signing of this document.
This agreement shall remain active for a period of 1 year of signing unless one of the following occur,
Termination by either party in disregard for the terms and conditions. Lapse of contract due to no extension or finalization of franchise agreement. Legal proceedings from either agreeing party.By signing this agreement both parties acknowledge understanding and agreement of all above listed terms and conditions.