FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT ("Agreement") is made on [Date], BETWEEN: [Franchisor Name], a [State] corporation, of [Franchisor Address] ("Franchisor") AND [Franchisee Name], a [Entity Type], of [Franchisee Address] ("Franchisee").
1. GRANT OF FRANCHISE
1.1 Franchisor hereby grants Franchisee the non-exclusive right to operate a [Business Type] franchise using the "[Brand Name]" system and marks.
1.2 Territory: [Geographic Description] with ☐ exclusive ☐ non-exclusive rights.
1.3 Term: [Number] years commencing [Start Date] with option to renew for [Number] additional terms.
2. FRANCHISE FEES
2.1 Initial Franchise Fee: $[Amount] due upon signing this Agreement.
2.2 Royalty Fee: [Percentage]% of gross revenue due monthly by the [Day] of the following month.
2.3 Advertising Fee: [Percentage]% of gross revenue for national marketing fund.
2.4 Technology Fee: $[Amount] monthly for system support and software licensing.
3. FRANCHISOR OBLIGATIONS
3.1 Initial Training: [Duration] training program covering operations, marketing, and management for up to [Number] persons.
3.2 Operations Manual: Comprehensive operations manual and periodic updates covering system standards.
3.3 Marketing Support: National advertising campaigns and co-op advertising programs.
3.4 Site Approval: Assistance in site selection process and approval of proposed locations.
3.5 Ongoing Support: Continuing consultation and support throughout the franchise term.
4. FRANCHISEE OBLIGATIONS
4.1 Operating Standards: Maintain all system standards, specifications, and quality requirements.
4.2 Training Completion: Complete all required initial and ongoing training programs.
4.3 Financial Reporting: Submit monthly financial statements and operational reports as required.
4.4 Insurance: Maintain comprehensive liability insurance with minimum coverage of $[Amount].
4.5 Operating Hours: Maintain minimum operating hours of [Schedule] unless approved otherwise.
5. OPERATIONAL REQUIREMENTS
5.1 Staffing: Maintain adequate staffing levels to ensure proper customer service and system standards.
5.2 Inventory Management: Maintain minimum inventory levels and purchase from approved suppliers only.
5.3 Quality Control: Submit to periodic inspections and mystery shopper evaluations.
5.4 Customer Service: Maintain customer service standards consistent with system requirements.
6. INTELLECTUAL PROPERTY
6.1 All trademarks, trade names, service marks, and proprietary materials remain the exclusive property of Franchisor.
6.2 Franchisee receives limited license to use intellectual property solely in connection with franchise operation.
6.3 Franchisee acknowledges Franchisor's ownership and shall not contest or challenge such ownership.
7. NON-COMPETE AND CONFIDENTIALITY
7.1 During franchise term and for [Time Period] after termination, Franchisee shall not operate competing business within [Geographic Restriction].
7.2 Trade Secrets: Franchisee shall maintain strict confidentiality of all proprietary information, methods, and trade secrets.
7.3 Employee Restrictions: Key employees must sign confidentiality and non-compete agreements.
8. TRANSFER RESTRICTIONS
8.1 Franchise may not be sold, assigned, or transferred without Franchisor's prior written consent.
8.2 Transfer Requirements: Proposed transferee must meet Franchisor's qualification standards and complete training program.
8.3 Transfer Fee: $[Amount] fee for processing and approving any transfer.
9. TERMINATION
9.1 Automatic Termination Events: Bankruptcy, conviction of felony, abandonment of franchise, or assignment for benefit of creditors.
9.2 Termination for Breach: Material breach not cured within [Days] days after written notice.
9.3 Termination Without Cause: Either party may terminate upon [Notice Period] written notice.
10. POST-TERMINATION OBLIGATIONS
10.1 Immediate Cessation: Stop using all trademarks, trade names, and proprietary materials.
10.2 Non-Compete Period: [Duration] restriction on operating competing business in protected territory.
10.3 Return of Materials: Return all confidential information, operations manuals, and proprietary materials.
11. DISPUTE RESOLUTION
11.1 Mediation: Disputes shall first be submitted to mediation under [Mediation Rules].
11.2 Arbitration: Unresolved disputes decided by binding arbitration under [Arbitration Rules].
11.3 Venue: All proceedings conducted in [Location].
12. GOVERNING LAW
This Agreement shall be governed by the laws of [State/Jurisdiction] without regard to conflict of law principles.
13. MISCELLANEOUS
13.1 Entire Agreement: This Agreement constitutes the entire agreement and supersedes all prior negotiations.
13.2 FTC Compliance: Franchisee acknowledges receipt of FTC Franchise Disclosure Document at least 14 days before signing.
13.3 Independent Contractor: Franchisee operates as independent contractor, not employee, partner, or agent of Franchisor.
DISCLAIMER
This template must be reviewed by franchise counsel and may require state franchise registration and specific disclosure documents under federal and state franchise laws.
SIGNATURES
FRANCHISOR:
_________________________ Date: __________ [Name], [Title] [Franchisor Name]
FRANCHISEE:
_________________________ Date: __________ [Name], [Title] [Franchisee Name]
