Franchise Glossary
Franchise Agreement
The binding legal contract between the franchisor and franchisee that governs the franchise relationship.
The franchise agreement spells out the rights and obligations of both parties, including fees, territory, term length, renewal conditions, termination provisions, and operating requirements. It is typically a non-negotiable, take-it-or-leave-it document, although some terms may be negotiable depending on the franchisor. A copy of the standard franchise agreement is included as an exhibit in the FDD. Having a franchise attorney review this agreement before signing is strongly recommended.
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