Franchise Agreement Overview and Template

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Lasya Pamidi

Business contracts
Franchise Agreement
Legal
Last updated on April 30th, 2021

What is a Franchise Agreement?

A franchise agreement is a legally binding document that outlines a franchisor’s terms and conditions for a franchisee. The party that franchises their already well-developed business model is called the franchisor and the party that agrees to certain terms and conditions in order to create their own franchised business is called the franchisee. In the agreement, the franchisor lays out the expectations and requirements for a franchisee to run a business under their brand name.

The franchise agreement format will characterize the foundation of the terms between both the consenting groups, define the remuneration for the franchisee (payment in the way of royalties, for the usage of the business trademark, etc), mention conditions upon the usage of the brand name, specify the extent of the agreement, mention terms concerning disciplinary provisions and so on.

Applicable Laws

Benefits of a Franchise agreement

What should a franchise agreement include

The most essential elements of a franchise agreement sample are as below-

Franchise Agreement Template
Download Franchise Agreement Template for your Company
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Franchise Agreement Template
Download Franchise Agreement Template for your Company
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FAQs

What is a franchisee?

A franchisor is any business, which has a parent company that provides a basic business model and brand name. The parent company loans these principles and brand image to a third party, known as a franchisee. While the franchise is owned, operated, and managed by individuals, the entire process is overseen by the larger parent company, which is usually an MNC.

Does India have specific laws for such franchisee businesses?

No. India does not have separate laws that deal explicitly with franchise business models. However, we do have laws regarding how they must function. But several enactments help control and regulate the functioning of franchise businesses in India.

What is the function of Foreign Exchange Management Act, 1999?

When there is foreign currency and foreign assets are include this act comes into action. International brands like Reebok, KFC, Nike, controls and manages their franchise in India with this Act.

Got Questions? Ask Away!

  1. Hey @HarshitShah

    Yes. Any time the terms of the agreement change, this should be documented in a new contract. The new contract should also make clear this contract replaces the old contract.