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What is a Franchise Agreement?

A franchise agreement is a legal document between a franchisor and franchisee. When buying a franchise, the franchise agreement will constitute your primary agreement with the franchisor. Franchise Agreements govern the scope and nature of your franchise relationship and address rights and obligations such as:

  1. Franchise fees;
  2. Royalties;
  3. Advertising;
  4. Protected Territory;
  5. Franchise term;
  6. Approved products and services;
  7. Reporting sales; and
  8. Future transfer and sale.

The franchise agreement also defines the obligations and support owed by the franchisor to its franchisees. Franchise agreements are critical and should be reviewed with a franchise lawyer before buying or investing in a franchise.

If you are buying a franchise, learn more about a step-by-step process for buying a franchise and visit our complimentary Franchisee University Video Series.

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