Overview of a Franchise Agreement

What is a Franchise Agreement?

A Franchise Agreement is a contract whereby a franchisee buys the right to run the business of the franchisor at a designated location/market.

The Franchise Agreement delineates the respective rights and obligations of the franchisor and franchisee in the franchise arrangement.

Under a Franchise Agreement, the franchisor’s obligations would be training and providing assistance, while those of the franchisee will be focused on the operation of the business e.g. the use of intellectual property rights.

Key points included

  • Franchise costs;
  • Details of franchise location;
  • Franchise ownership transfer arrangements;
  • Franchise duration;
  • Description of services;
  • Franchise operational details;
  • Trade mark use;
  • Introduction and commission fee arrangements; and
  • Payment arrangements.

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