A franchise contract is a legal document which is made in the case when an owner of a company, organisation or any other entity agrees to put his business on franchise for a specified period of time. The party who owns the business is known as the franchisor and the party who agrees to run the business on behalf of the owner is known as the franchisee. The contract consists of details such as effective date, termination date, price of franchise, terms and conditions etc. Any such contract must be carefully made between the parties and must follow a certain formal format. The following given points shall be useful for those who wish to draft a franchise contract.

  • Any franchise contract must be started by mentioning the commencement date of the franchise agreement.
  • The names and titles of the parties (FRANCHISEE AND FRANCHISOR) must follow next and their contact details including contact number, official address, email address, fax number etc must also be included.
  • In a franchise contract, it is important to mention the areas which the franchisee must work upon or the services which are expected of him/her.
  • A franchise contract must cover points such as the price of franchise which the price which the franchisee pays to buy the business running rights from the franchisor.
  • The most important part of any such franchise contract is the part where the terms and conditions are mentioned. These terms and conditions must be well detailed and should be written down point wise to ensure clarity and to avoid confusion.
  • The entire tone of the franchise contract must be formal and must include legal terminology.
  • The termination date of the contract must also be mentioned along with the conditions under which the contract can terminate prematurely.
  • The last part of the contract must be reserved for the signatures of the involved parties.

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