Franchise agreements (FA) in America are a set of documents between the franchisor and franchisee which tell about the duties, rights, and obligations of both parties. Once both parties sign then it will become a legal binding contract (LBC) between the parties i.e. franchisor and franchisee. At the time of an initial submission of business request to the franchisor, the franchisor will give a model copy of the franchise agreement to the franchisee along with disclosures to read, understand, and approve. As it going to be an LBC, there are so many clauses which you may not be familiar with. Hence it is always good to hire attorneys who are specialized in contract law or franchise law and take their advice and opinion before signing any documents.
As of now there is no standard form for a franchising business agreement. Participation, responsibilities, duties, obligations, training, assistance, availability, duration, financial implications, terms, conditions, policies, services, products, area operations, territories, transferability, salability, settlement of disputes, terminations, renewal, and methodology vary from franchisor to franchisor.
These are the common terms and conditions in franchise agreements (FA) however in realty there are other terms and conditions present which vary from franchisor to franchisor. All these you will see in the franchise discourse documents (FDD)/uniform franchise offering circular (UFOC). As this is a legal binding contract (LBC) it is very important for you to hire an attorney and accountant to get their advice and opinion before you sign any paper or deposit any monies. Before singing, compare and make sure that the FDD/UFOC offerings match with agreements.
To know more about franchise agreements (FA), or if you have further questions about franchise agreements, or need assistance with franchise agreement issues, please contact us at help@bizworldusa.com or 510-556-1600 and one of our approved third-party professionals will guide you.