A franchise agreement is a legally binding agreement between two parties. One party is known as the franchisor and the other, franchisee.
A franchise agreement allows a person to use another person's goodwill and/or know-how to carry out a certain business or activity. The person who grants such rights is known as the franchisor and the person paying for these rights is known as the franchisee.
A franchisor may grant the right to use:
- Trade name
- Business system
- Business process
This agreement to produce a product or provide a service which need to conform to certain standards.
The franchisee makes a one-time payment to the franchisor in exchange for the rights. Apart from this, the franchisor usually receives a certain share in sales or revenue of the franchisee.
PocketLawyer is India's leading platform for business registration services and understands that no two Franchise Agreement can be identical. PocketLawyer does not believe in using templates and instead drafts legal agreements from scratch so that the needs of the client can be tailor made into the agreement itself. The agreement will be drafted by an experienced lawyer who understands the importance of a well-drafted Franchise Agreement.
Who is it for?
You need it if you are a
- Franchisor, or
Benefits of Franchise Agreement
Running a franchisee business is complicated both from the perspective of franchisor and franchisee. Therefore, it is crucial to have a watertight franchisee agreement in place. It has the following benefits.
- Defining geographical territory of business operations
- Specifying rates of royalties and revenue share, if any
- Providing for dispute resolution
- Defining rules and restrictions, if any applicable to the franchisee
- Specifying terms of renewal of agreement
- Defining terms of franchisor support
Drafting Franchise Agreement
Apart from the general definitions and party details clause, the following clauses form major part of a franchisee agreement.
1. Rules of operation
This clause will define the following terms in detail.
- Rules that the franchisor needs to follow
- Responsibility of franchisor while operating
- Quality standards of the product or service
- Restrictions, if any apply to the operation of franchise
- Obligations of franchisor and franchisee
2. Terms of Support
Usually, the franchiser will provide support services to the franchisee in respect of customer care and product quality specifications. This clause will define all such terms of support in detail. It will set the expectations of franchisee and obligations of franchisor.
This clause will define the initial duration for which the agreement will be valid.
4. Renewal of agreement
This clause will specify the conditions subject to which the agreement will be renewed.
5. Share in revenue
This clause will specify the percentage of revenue that the franchisor will receive in exchange for granting rights to the franchisee.
6. Payment of royalties
Sometimes, the franchisor and franchisee may agree upon payment of royalties. In such case, this clause will define the amount and mode of payment of royalties.
7. Location and Territory
This clause defines the physical location of the operation of franchise business.
Procedure for custom-drafted Agreement
- Initial consultation and discussion
- The Expert will draft customized contract with placeholders for custom fields.
- The first draft will be shared in three (3) days
- Two round of changes to the first draft.
What is the fee?
Fee for preparing a franchise agreement starts from Rs. 7999
Why Choose PocketLawyer for drafting Agreement?
- Experienced and qualified professionals with 12 years of average experience.
- Access to highly qualified professionals anytime, anywhere in India.
- Tailor-made agreement to fit the exact needs of clients
- Fixed price. No hidden fees or long-term commitment.
- 100% satisfaction guaranteed. Our money back guarantee makes sure that you get complete satisfaction, every time you choose our services.
What is more?
- Our dedicated support team is always there to help you with any query or issue that you may have.
- Choosing PocketLawyer means the best service, at the best price.
Most importantly, we deliver what we promise. On time, every time.