This document establishes a franchise agreement between a party who wishes to be a
franchisee and a party that holds the rights to issue a franchise. The agreement
specifies the term, the location and construction, payments, any territorial limitations,
instruction and supervision, and financial inspection. It contains numerous standard
provisions as well as opportunities for customization to address the specific needs of the
parties. This document should be used by franchisors and franchisees when granting a
license to construct and operate a franchise.
This Franchise Agreement (this “Agreement”) is hereby made and entered into on this
_____ day of _______, _____ (the “Effective Date”) by and between _______________
(“Franchisor”) and _____________________________________ (“Franchisee”).
WHEREAS, Franchisor is the originator and creator of a ____________________ (Type
of franchise) known as ______________________________________ (Franchise name) (the
“Franchise”), including a special design of a building, specifically designed equipment and signs,
equipment layout plans, inventory, bookkeeping system, and a schedule of business policies and
practices (the “Franchise System”);
WHEREAS, Franchisor has developed, used, and continues to use and control the usage
of proprietary interests, trademarks, service marks, and trade names in connection with the
Franchise and the business of thereof, including ___________________ ___________________
(Name of Trademark and Trade name), which is registered as a trademark on the Principal
Register of the United States Patent Office;
WHEREAS, Franchisee desires to acquire a license to adopt and use the Franchise, the
trademarks, service marks, and trade names, in the conduct of a business at a specified location,
under the supervision of and in accordance with the service standards approved by Franchisor;
WHEREAS, Franchisee understands the importance of Franchisor’s high and uniform
standards of quality, cleanliness, appearance, and service to the value of the Franchise and the
necessity of opening and conducting Franchise operations in conformity with the Franchise and
in accordance with Franchisor’s standards and specifications.
NOW, THEREFORE, in consideration of the mutual covenants set forth below,
Franchisor and Franchisee agree as follows:
1. GRANT OF FRANCHISE
1.1 Franchisor grants to Franchisee a license to use, during the term and on the conditions set
forth in this Agreement, the names, symbols, and trademark associated with Franchisor's name,
and the Franchise System.
1.2. Franchisor shall not, while this Agreement is in force, conduct a similar operation, or
grant a similar franchise to any other franchisee, within ___________________
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_________________________________________ (Describe a territorial limitation).
1.3 Franchisee shall use the name of Franchisor and the trademarks associated with the name
of Franchisor in the _________________________________ (Type of Franchise), and
Franchisee’s place of business shall be known only as
__________________________________________________ (set forth name).
1.4 The name of any corporation operating this Franchise may include the words
“_____________________________________” (set forth words) or any other trademark
language owned by or licensed to Franchisor, but only with the prior, express, and written
consent of Franchisor. Upon termination of this Agreement for any reason, the name of the
corporation shall be amended to delete such words.
2.1 This Agreement shall continue for a period of __________ (__) years from the Effective
Date of, and shall be automatically renewed for __________ (__) additional year terms, unless at
least __________ (__) months before the expiration of any year term, Franchisee gives to
Franchisor notice in writing of termination at the end of such term.
3. LOCATION AND CONSTRUCTION
3.1 Franchisor shall obtain for Franchisee a location for the construction and establishment of
the Franchise operation within the City of _______________, in the State of __________. Such
location shall be secured by Franchisor signing as prime tenant on a lease with the landowner of
such location. In the event Franchisor fails to execute such a lease within the area herein
designated within ___ (__) year(s) from the Effective Date of this Agreement, Franchisee may
terminate this Agreement and receive a refund of any of Franchisee’s payments plus __________
percent (__%) interest thereon.
3.2 Franchisor agrees to construct, at the chosen location, a standard Franchise System
building that shall be built in accordance with the plans and specifications furnished by
Franchisor. Franchisor shall also provide periodic inspections of the construction at the
Franchise site to determine if there has been compliance with the Franchise System plans and
3.3 Franchisor shall sublet the above-described realty and impro