Franchising can be an exciting and profitable way to start a business. However, it is crucial to understand the terms and obligations outlined in a franchise agreement before signing on the dotted line. In this blog, we will provide a franchise contract sample and discuss the essential components that are typically included in such agreements.

Franchise Contract Sample

The following is a sample franchise contract that outlines some of the standard terms and conditions that may be included in a franchise agreement. This is for illustrative purposes only and should not be considered legal advice. Always consult with an attorney to review and understand the specific terms of a franchise agreement before signing.

Parties

This franchise agreement (the “Agreement”) is entered into between Franchisor Company (the “Franchisor”) and Franchisee Name (the “Franchisee”). The Franchisor and Franchisee agree to the terms and conditions set forth in this Agreement.

Grant of Franchise

The Franchisor grants the Franchisee the right to use the Franchisor’s trademarks, service marks, logos, and other proprietary materials (the “Marks”) to operate a franchise business at the location specified in Schedule A.

Term

This Agreement shall commence on the date of execution and shall continue for a period of 10 years (the “Term”). The Franchisee may renew this Agreement for an additional 10 years by giving written notice to the Franchisor at least 180 days before the expiration of the Term.

Initial and Ongoing Fees

The Franchisee shall pay an initial franchise fee of $50,000 upon execution of this Agreement. In addition, the Franchisee shall pay a royalty fee of 6% of gross sales to the Franchisor on a monthly basis.

Training and Support

The Franchisor shall provide the Franchisee with an initial training program to learn the operating procedures and standards of the franchise business. The Franchisor shall also provide ongoing support, including updates on new products and services, marketing strategies, and business development.

Operations and Standards

The Franchisee agrees to operate the franchise business in accordance with the Franchisor’s operating procedures and standards, as set forth in the Franchise Manual. The Franchisee shall also maintain the quality of products and services offered by the franchise business to meet the Franchisor’s standards.

Termination and Renewal

Either party may terminate this Agreement for cause upon written notice to the other party. The Franchisor may terminate this Agreement if the Franchisee breaches any material term or condition of this Agreement. The Franchisee may terminate this Agreement if the Franchisor breaches any material term or condition of this Agreement. The Franchisee may renew this Agreement for an additional term if the Franchisee is in good standing with the Franchisor and meets the renewal criteria.

Confidentiality and Non-Disclosure

The Franchisee agrees to keep all confidential information of the Franchisor, including trade secrets, customer information, and financial information, confidential and not disclose it to any third party without the Franchisor’s written consent.

Governing Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the state of [state name], without regard to conflicts of laws principles. Any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in [city name and state name].