Turn your business into a franchise

The franchise agreement

When you franchise your business, you - the franchisor - enter into a legal agreement with the franchisee. A clear, written contract is essential.

This franchise agreement sets out what rights and obligations you each have. Key issues include:

  • what territory the franchisee can operate in and whether they have exclusive rights in that territory
  • what rights the franchisee has to use your intellectual property - eg your trade marks
  • what restrictions there are on what the franchisee can do
  • what fees the franchisee will pay
  • how you will help the franchisee initially - eg training
  • what continuing support you will provide - eg national marketing campaigns or administrative support
  • how long the franchise lasts and what happens at the end of the term
  • what happens if either of you wants to bring the agreement to an end or sell your business

Agreements tend to be in favour of the franchisor. However, if the agreement is too one-sided in the franchisor's favour, it will be difficult to attract potential franchisees. For more information on what franchisees look for in a franchise agreement, see our guide on how to buy a franchise.

Franchise agreements involve complex legal issues.

You should take advice from a lawyer with franchising expertise. Find lawyers with franchising expertise on the British Franchise Association (BFA) website.

Subjects covered in this guide

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01235 820 470


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