Business-in-a-Box's Franchise Agreement Template

Franchise Agreement Template

Understanding a Franchise Agreement

Franchises are incredibly important business structures in our modern commercial society. The benefits of franchises mean that more and more businesses are entering into franchise agreements. As part of this, filling out and completing franchise agreements is an important and necessary step. Fortunately, there are many franchise agreement templates that make it easier for people entering into a franchise to complete the required paperwork and get their new business up and running sooner.

Benefits of Franchises

There are many benefits associated with running a business as a franchise and understanding these is important. Franchises allow your business to benefit from having a well-known brand at your backing; meanwhile, making a brand into a franchise likewise can be beneficial.

For the Brand

Creating a franchise for your brand is helpful, and that is why more and more fledgling brands are taking the plunge and making their brand into a franchise. Franchises offer numerous benefits, including the ability to grow the business more quickly. Creating a franchise allows more stores of your brand to be opened across a wider expanse of land; this is commonly how businesses are able to have stores across – for example – an entire country. Moreover, creating the brand into a franchise also allows the brand to collect revenue from franchisees through franchise royalties, which provides your business with an additional revenue stream.

For the Franchisee

Opening a new business as a franchise by “hiring” an established brand naturally comes with a plethora of different benefits for the franchisee. By joining a franchise, the new business benefits from having a brand name immediately; this brand name should be recognisable by potential customers, making marketing the new business easier.

For example, a fast-food restaurant will be instantly recognizable if it is a franchisee of one of the big fast-food franchises. However, if an independent fast-food restaurant opens with no brand name, it’ll need to work hard to promote itself and its food.

Franchises Are Becoming More Popular

As mentioned, an increasing number of companies are turning to franchises for starting their new business. This offers a massive benefit. Having an established brand name from day one, before even considering the other benefits such as purchasing power and support, is massively useful. However, it is important for businesses entering into a franchise to complete a franchise agreement before they can officially become a trading member of the franchise.

What Are Franchise Agreements?

As the name would suggest, franchise agreements are important components of establishing a business as a franchise. The franchise is created between a franchisor (the business or entity providing the brand name) and a franchisee (the business or entity looking to use the brand name).

The Purpose of Franchise Agreements

Franchise agreements are an essential, underpinning document for a new franchise relationship. They contain information designed to ensure that the franchisee runs their business by the rules of the franchise. And, as such, they are important documents to get right.

Franchise agreements are legal documents. Thus, they hold a lot of influence in terms of how the new business and franchise alike are run. As a contract, it is hence essential that all signing parties are fully aware of the implications and rules set out in the franchise agreement.

Franchise agreements establish the requirements of the franchisee in using the franchise’s brand name. Hence, they are absolutely essential documents and truly underpin the relationship between the franchisee and the franchisor. They determine the important aspects of the franchising terms, such as the duration of the franchise agreement and the like.

Can the Terms of a Franchise Agreement Be Changed?

The terms of a franchise agreement can potentially be negotiated down the line. However, it’s better to get the terms of the agreement right to start with to avoid potential legal costs later on. Some franchise agreements may cover the exact circumstances in which changes can be readily made within the body of the text itself. Other times, legal support may be necessary to implement a change to the established franchise terms. As an additional resource, you may find our Basic Franchise Agreement Terms checklist helpful.

What to Include in Franchise Agreement Templates

When it comes to franchise agreement templates, it’s important that you include all of the relevant information to make sure your franchise agreements are completed effectively. Some of the information that you should strive to write into your franchise agreements include:

  • Key terms of the franchise agreement – some of the most important things that you should include in every franchise agreement are the key details of the franchise. Some information that this ought to cover could include the names and addresses of the franchisor and franchisee. In addition, you should also note the business address(es), the length of the franchise agreement, and any fees and charges applicable to the franchise. Therefore, this should all be included clearly in a franchise agreement. Franchise agreement templates will help you lay out this information in a clear and concise way.
  • Terms surrounding the sale of the business – your business will hopefully be profitable, but the franchise agreements should still cover what happens in the event that you sell the business. Indeed, the business may not necessarily be able to be sold with the franchising rights. This is the case if the franchisor does not approve of the new owners of the business. Therefore, these requirements should be covered under the sale aspect of the agreements.
  • Renewal terms – at some point, the term for the franchise will end. At this point, the franchisee will need to apply for a new term for the franchise. Admittedly, this is somewhat misleading due to the fact that the existing franchise agreement isn’t actually being renewed. Rather, a new one with the same terms is made. However, it should still be carefully considered. Information regarding this can be included in the franchise agreements so that it is readily available when the time comes for the franchise rights to expire.
  • Operating requirements of the business – one of the integral parts of running your business as a franchise is that you need to adhere to the franchisor’s management style. This means your business needs to be managed in a similar way if it is to use the franchise’s brand name; therefore, this should be included in the franchise agreements. This information should be directly linked to the franchise’s operations manual.
  • Terminations – this section should cover the factors that can result in the termination of the franchise contract. If any of the terms of the franchise agreements are breached, then the franchisor has the right to terminate the contract with the franchisee. These rights should be expressed in the franchise agreements.
Make Sure You Get a Second Opinion

If you’ve drafted a franchise agreement but you’re not entirely sure that it is of the standard you’d hoped for, it’s important to get a second opinion. A second opinion for your franchise agreements will ensure that there aren’t any mistakes or loopholes in the agreement that you might have missed. This is especially the case if you get the second opinion from a professional legal expert who can help out with all aspects of setting up your franchise business.

Remember – while franchise agreements can potentially be changed down the line, this is a costly and difficult process. As such, you should strive to ensure that the franchise agreement is right from the start to prevent these scenarios.

Franchise Agreement Templates Are A Great & Helpful Option

Franchise agreement templates are important parts of setting up a franchise and they can offer many benefits over drafting a franchise agreement without a template. Writing a franchise agreement from scratch can be difficult and time-consuming but relying on franchise agreement templates can solve this issue and make things much easier! Therefore, if you’ve been considering writing a franchise agreement, it’s vital you consider how using a template could make things easier.

There are many benefits associated with using franchise agreement templates that might make them a good option for you to try. Some of the benefits of franchise agreement templates are shown below, and these perks can include:

  • Improved efficiency for your business – creating a franchise agreement, naturally, is an incredibly time-consuming activity. Your business staff could spend a considerable amount of time on this process. That’s especially true if they are not trained in legal matters specifically (which they likely are not). Hence, using franchise agreement templates can represent a major reduction in the amount of time needed to complete the template. Indeed, franchise agreement templates do most of the hard work for your team, clearly laying out what needs to be put where. All that your staff need to do, therefore, is fill in the details as prompted and voila – the franchise agreement almost writes itself (with a little professional input from your team, of course).
  • Your staff members know the business better than anyone else. Your business or franchise is unique, and as such, you want someone who knows how it works to help with writing your franchise agreements. Of course, you could hire a legal team to help with this, but it would take a lot of time to teach them on the specific workings of your business. Instead, completing the franchise agreements yourself could offer a much better solution.
  • Legal advice is expensive – your franchise agreements are legal documents and so, it’s important you get the best support possible for creating them. With that being said, legal advice can be incredibly expensive. That is particularly true when you take into account the time taken to teach the legal team about how your business works. Therefore, filling out the franchise agreements yourself could represent a better and more affordable solution for your business – and franchise agreement templates can take the pressure off with this!
  • Professional, expert-designed documents – when you source high-quality franchise agreement templates, you can be confident that your documents will have been finished to a high standard. Indeed, professionally designed franchise agreements are sure to meet your every franchising need. Don’t put your documents at risk of not quite living up to their full potential.
Sign Up to Business-in-a-Box to Download Your Ideal Franchise Agreement Template!

Indeed, franchise agreements are incredibly important documents that serve to underpin the franchise arrangement. Therefore, you need a template that will provide you with a professional finish for your final documents.

We pride ourselves on offering a wide range of some of the highest quality franchise agreement templates on the market. For our team, nothing is as important as making sure our customers have access to the premium templates that can help them attain their business goals. That is why we’ve worked tirelessly to ensure that you’ll find that ideal franchise agreement templates from our expansive collection.

Sign up to Business-in-a-Box today and browse our collection of over 2000 professionally designed business and legal templates, including franchise agreement templates.

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