Franchise Agreements

What is a franchise?

Franchises are a way for businesses to control their expansion and growth in either domestic or oversees markets. Here in the UK, people often associate franchises agreements with companies such as Dominos, Subways or Costa Coffee, as they are well-known businesses whose business models have relied on Franchise Agreements. However, there are a large number of businesses which use Franchise Agreements.

Under a franchise, there are often 2 key parties: the franchisor, who owns the business model; and the franchisee, who is looking to run the business.

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A Master Franchise Agreement is a type of Franchise Agreement. For Master Franchise Agreements, there will often be more than 2 parties: a master franchisor, a master franchisee and a franchisee. This arrangement allows one company to hand out the franchise for a particular geographic location to another (the Master Franchisee). The Master Franchisee then independently selects Franchisees to expand the business.

A franchise works because it can be a good way for businesses to grow without borrowing or inserting large amounts of additional capital into the business.

What do Franchise Agreements do?

There are many areas to consider when establishing a Franchise Agreement. There will be targets which will need to be established for the franchisee, along with restrictions, how to terminate the agreement, how the franchisee should conduct business, how and in what circumstances money should be exchanged. A Franchise Agreement is a legal contract which sets out these terms, along with others which the franchisor lays out for the franchisee.

Which business models are most suited to Franchise Agreements?

Not every business model is suited to franchising. If you would like to discuss whether franchising might work for your business, speak today with one of our Commercial Contract lawyers.

Why do Businesses Use Franchise Agreements?

For franchisors, a Franchise Agreement is an essential document to put in place. It sets out the understanding that you have with the franchisee and it governs the business relationship that you have, including setting out dispute resolution mechanisms and how to manage the business.

For franchisees, a Franchise Agreement can provide certainty as to your future relationship with the franchisor.

How much does your Franchise Agreement cost?

Our price depends on the nature of the legal support you require:

1. To create a basic Franchise Agreement, our prices begin from £1,500.00.
2. To review a proposed or existing Franchise Agreement, our prices begin from £750.00.
3. To negotiate a new Franchise Agreement, our prices begin from £1,250.00.

How do I get started?

1. We’ll ask you to sign and return our Client Care Letter and to place monies on account.
2. Depending on your availability, we’ll schedule a call within 7 working days, to take your instructions and learn about your business.
3. We’ll aim to provide you with a first draft 7 workings days after taking your instructions.
4. Once we receive your feedback, we’ll send you a final version of your Franchise Agreement, ready for your business to use.