A Franchise relationship is an arrangement where a license to conduct business under a specific brand’s name is given to an independent business owner providing the owner the benefits of a big business network. This arrangement helps these business owners in terms of capital, speed of growth, motivated management, and risk reduction. This contract is hence made between a franchisor and a franchisee. Terms and conditions of this agreement vary depending on the state’s jurisdiction and franchise’s system of the franchisor.
Our team of professionals are well versed with all factual and legal scenarios that are primarily required to engage in drafting a sound Franchise Agreement.
1. Understanding requirement
The initial process involves understanding of requirements of both the Franchisor and of the Franchisee, along with the brand name for which the pooling of resources for the franchising is being done.
After a detailed discussion with the parties, drafting of the contract by our professionals/lawyers is done, post which the draft is reviewed by the parties.
Once the parties give a green signal, the agreement is executed between the parties to enable the franchisee to be granted.
- Franchisor and Franchisee details.
- Terms for the franchise fee and consideration.
- Details about business operations.
- Details about the use of trademark and Intellectual Property.
- Whether an assignment of the franchise is transferable or not.
1. What questions should I consider when evaluating a specific franchise?
Some of the questions to be considered are whether the franchise owner is true and documented owner of the franchise or not, whether the franchise does not infringe on any rights/ ownership etc. of another party, whether the franchise is following all the applicable laws, and policies that are specific to the business in general.
2. How long is generally a franchise agreement valid for?
There are legal reasons not to extend the terms of the franchise agreement for more than five years.