This template provides a clear franchise agreement outlining roles, responsibilities, and rules between the franchisor and franchisee. It ensures mutual understanding, protects both parties, and supports smooth franchise operations.
Franchise Agreement
1. Parties Involved This agreement is between:
- Franchisor: [Your Name/Business Name].
- Franchisee: [Franchisee’s Name/Business Name].
2. Purpose of the Agreement This agreement gives the franchisee the right to run a [Your Store Name] franchise. The franchisee agrees to follow the rules and standards set by the franchisor.
3. Franchisee Responsibilities The franchisee agrees to:
- Operate the franchise according to the franchisor’s guidelines.
- Pay the required fees on time, including:
- Initial franchise fee: $[amount].
- Monthly royalty fee: [percentage]% of gross sales.
- Marketing fund contribution: $[amount] per month.
- Use approved suppliers and products.
- Maintain the store’s appearance and follow branding guidelines.
- Attend training programs provided by the franchisor.
4. Franchisor Responsibilities The franchisor agrees to:
- Provide training and support to help the franchisee run the business.
- Share marketing materials and tools.
- Approve suppliers and products for the franchisee.
- Offer guidance on improving store performance.
5. Term of the Agreement This agreement lasts for [number] years. After this time, the franchisee may:
- Renew the agreement for another term, if both parties agree.
- End the agreement and stop running the franchise.
6. Termination The agreement may be terminated if:
- The franchisee fails to follow the rules.
- Fees are not paid on time.
- Either party gives [number] days’ written notice.
7. Dispute Resolution If there is a disagreement, both parties agree to:
- Try to resolve the issue through discussion.
- Use mediation or arbitration if needed.
8. Additional Terms Include any special terms here, such as restrictions on opening competing businesses or rules for transferring the franchise.
9. Signatures This agreement is signed by:
- Franchisor: [Name/Signature/Date].
- Franchisee: [Name/Signature/Date].
Example: How to Use This Template
The Scenario: A music store, “Melody Makers,” wants to expand by franchising.
What They Did:
- Filled in the template with their franchise fees, branding rules, and training requirements.
- Reviewed the agreement with a lawyer to make sure it was complete.
- Shared the agreement with new franchisees, who signed before starting their stores.
The Results:
- All Melody Makers franchises followed the same rules and branding.
- Franchisees felt supported and knew their responsibilities.
Next Steps
- How to Start: Fill in the blanks in this template with details about your franchise.
- Take Action: Review the agreement with a lawyer to make sure it’s complete.
- Stay Connected: Share the agreement with franchisees and answer their questions.
- Keep Improving: Update the agreement as needed to include new rules or changes.
By using this franchise agreement template, you can create clear expectations and build a strong partnership with your franchisees!
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