A franchise agreement is a legal, binding contract between a franchisor and franchisee. In the United States franchise agreements are enforced at the State level.
Prior to a franchisee signing a contract, the US Federal Trade Commission regulates information disclosures under the authority of The Franchise Rule.[1] The Franchise Rule requires a franchisee be supplied a Franchise Disclosure Document (FDD) (originally called Uniform Franchise Offering Circular (UFOC)) prior to signing a franchise agreement, a minimum of fourteen days before signing a franchise agreement.[2]
Once the Federal ten-day waiting period has passed, the Franchise Agreement becomes a State level jurisdiction document. Each state has unique laws regarding franchise agreements.
A franchise agreement contents can vary significantly in content depending upon the franchise system, the state jurisdiction of the franchisor, franchisee, and arbitrator.
It overall provides the investor with a product, a branded name and recognition, and a support system.
A typical franchise agreement contains
Franchise Disclosure Document (FDD)
Disclosures required by state laws
Parties defined in the agreement
Recitals, such as Ownership of System, and Objectives of Parties
Definitions, such as
Agreement, Territory Area, Area Licensee, Authorized deductions, Gross Receipts, License Network, The System Manual, Trademarks, Start Date, Trade name, Termination, Transfer of license.
Licensed Rights, such as
Territory, Rights Reserved, Term and Renewal, Minimum Performance Standard
Franchisors Services, such as
Administration, Collections and Billing, Consultation, Marketing, Manual, Training and Vendor Negotiation
Franchisee Payments, such as
Initial Franchise Fee, Training Fees, Marketing Fund, Royalties, Renewal fee, and Transfer fee
Franchisee Obligations, such as
Use of Trademarks, Financial Information, Insurance, Financial and Legal responsibility
^"Consumer Information" (PDF). ftc.gov. Retrieved 25 January 2015.
^"Buying a Franchise: A Consumer Guide". ftc.gov. Retrieved 25 January 2015.
External linksedit
Look up franchise in Wiktionary, the free dictionary.
International Franchise Association
American Association of Franchisees and Dealers
Franchise Brokers Association
FTC Franchise FAQ Page
December 15, 2023
franchise, agreement, franchise, agreement, legal, binding, contract, between, franchisor, franchisee, united, states, franchise, agreements, enforced, state, level, prior, franchisee, signing, contract, federal, trade, commission, regulates, information, disc. A franchise agreement is a legal binding contract between a franchisor and franchisee In the United States franchise agreements are enforced at the State level Prior to a franchisee signing a contract the US Federal Trade Commission regulates information disclosures under the authority of The Franchise Rule 1 The Franchise Rule requires a franchisee be supplied a Franchise Disclosure Document FDD originally called Uniform Franchise Offering Circular UFOC prior to signing a franchise agreement a minimum of fourteen days before signing a franchise agreement 2 Once the Federal ten day waiting period has passed the Franchise Agreement becomes a State level jurisdiction document Each state has unique laws regarding franchise agreements A franchise agreement contents can vary significantly in content depending upon the franchise system the state jurisdiction of the franchisor franchisee and arbitrator It overall provides the investor with a product a branded name and recognition and a support system A typical franchise agreement contains Franchise Disclosure Document FDD Disclosures required by state laws Parties defined in the agreement Recitals such as Ownership of System and Objectives of Parties Definitions such asAgreement Territory Area Area Licensee Authorized deductions Gross Receipts License Network The System Manual Trademarks Start Date Trade name Termination Transfer of license Licensed Rights such asTerritory Rights Reserved Term and Renewal Minimum Performance StandardFranchisors Services such asAdministration Collections and Billing Consultation Marketing Manual Training and Vendor NegotiationFranchisee Payments such asInitial Franchise Fee Training Fees Marketing Fund Royalties Renewal fee and Transfer feeFranchisee Obligations such asUse of Trademarks Financial Information Insurance Financial and Legal responsibilityRelationship of Parties such asConfidentiality Indemnification Non Compete clausesTransfer of License such asConsent of franchisor Termination of license Termination by licenseeOther provisions Governing law Amendments Waivers Arbitration SeverabilitySee also editAmerican Association of Franchisees and Dealers Franchise consulting Franchise Disclosure Document Franchise fraud Franchise termination Franchising List of franchises The Franchise Rule U S Securities and Exchange CommissionReferences editTerms and conditions of franchise agreement Consumer Information PDF ftc gov Retrieved 25 January 2015 Buying a Franchise A Consumer Guide ftc gov Retrieved 25 January 2015 External links edit nbsp Look up franchise in Wiktionary the free dictionary International Franchise Association American Association of Franchisees and Dealers Franchise Brokers Association FTC Franchise FAQ Page Retrieved from https en wikipedia org w index php title Franchise agreement amp oldid 1138393535, wikipedia, wiki, book, books, library,
