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What is Franchise Agreement?

Franchise Agreement Details the relationship between a franchisor and franchisee, including fees and obligations.



Sample template:



Franchise Agreement

This Franchise Agreement (the "Agreement")

is made and entered into as of [Date], by and between BlueWave Franchising Inc., a corporation organized under the laws of the United States, having its principal office at [Address] (hereinafter referred to as the "Franchisor"), and GreenEats Enterprises, a corporation organized under the laws of [State] and residing at [Address] (hereinafter referred to as the "Franchisee").



1. Grant of Franchise

1.1. Franchise License


Subject to the terms and conditions of this Agreement, the Franchisor hereby grants to the Franchisee, and the Franchisee hereby accepts, a non-exclusive, non-transferable license (the "Franchise License") to use the Franchisor's trademarks, trade names, and service marks, including "FreshBites Cafe" (collectively, the "Marks") and the Franchisor's proprietary business system (the "System") in connection with the operation of a FreshBites Cafe franchise at a single, specific location (the "Franchised Business") as agreed upon by both parties hereto.



2. Territory

2.1. Territory Rights


The Franchisor hereby grants to the Franchisee the exclusive territorial rights within a geographical area (the "Territory"), defined as a [Number of Mile Radius] mile radius from the Franchised Business's location. The Franchisee shall have the exclusive right, during the term of this Agreement, to establish and operate the Franchised Business only within the Territory. No other FreshBites Cafe franchises shall be established by the Franchisor within the Territory during the term of this Agreement.



3. Franchise Fee

3.1. Initial Franchise Fee


Upon execution of this Agreement, the Franchisee shall pay to the Franchisor a non-refundable initial franchise fee of [Amount in words] Dollars ($[Amount]) (the "Initial Franchise Fee").



3.2. Royalty Fee


The Franchisee shall pay to the Franchisor, commencing on the first day of the calendar month following the opening of the Franchised Business, an ongoing royalty fee equal to [Percentage] % of the Franchised Business's gross monthly sales (the "Royalty Fee"). The Royalty Fee shall be payable by the Franchisee to the Franchisor on or before the tenth (10th) day of each calendar month during the term of this Agreement.



4. Franchisor's Support and Assistance

4.1. Training


The Franchisor shall provide the Franchisee with an initial training program for the operation of the Franchised Business. The training program shall include [Number of Days] days of on-site training at the FreshBites Cafe corporate headquarters and [Number of Days] days of on-site training at the Franchised Business location. Expenses for travel, lodging, and meals of the Franchisee and its employees during the training program shall be borne solely by the Franchisee.



4.2. Manuals


The Franchisor shall provide the Franchisee with one (1) copy of the FreshBites Cafe Operations Manual (the "Manual"), which shall contain the necessary operational, marketing, and administrative information and guidelines for the Franchised Business. The Franchisee shall, at all times, operate the Franchised Business in accordance with the procedures and guidelines set forth in the Manual.



5. Term and Termination

5.1. Term


The term of this Agreement shall be [Number] years from the date hereof, unless sooner terminated as provided herein. This Agreement may be renewed for successive periods of [Number] years each, provided that the Franchisee is, at the time of each renewal, in full compliance with all terms and conditions of this Agreement and any other agreements then in effect between the Franchisor and the Franchisee.



5.2. Termination


This Agreement may be terminated by the Franchisor upon the occurrence of any of the following events, after providing the Franchisee with written notice and a reasonable period within which to cure any default or breach:



  • (a) The Franchisee fails to pay any amount due to the Franchisor;

  • (b) The Franchisee fails to maintain the standards of quality and service required by the Franchisor;

  • (c) The Franchisee becomes insolvent, declares bankruptcy, or otherwise suffers from financial distress; or

  • (d) The Franchisee commits any act that may materially and adversely affect the FreshBites Cafe brand or the Franchisor's rights therein.



6. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the United States.



7. Entire Agreement

This Agreement, including its exhibits and any written amendments hereto, constitute the entire agreement between the Franchisor and the Franchisee and supersede all prior agreements, negotiations, and discussions between the parties relating to the subject matter hereof. No modifications, amendments, or waivers of any provisions of this Agreement shall be effective unless in writing and signed by both parties hereto.



8. Execution

IN WITNESS WHEREOF, the Franchisor and the Franchisee have duly executed this Agreement as of the date first above written.


BlueWave Franchising Inc.

By: ______________________________________

Name: [Name], Title: [Title]


GreenEats Enterprises

By: ______________________________________

Name: [Name], Title: [Title]

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Common Sections of a Franchise Agreement


In this Franchise Agreement, you will see the following sections:

  1. Grant of Franchise
  2. Territory
  3. Franchise Fee
  4. Franchisor's Support and Assistance
  5. Term and Termination
  6. Governing Law
  7. Entire Agreement
  8. Execution


Analysis/Summary of each section

  1. Grant of Franchise : This section explains that the Franchisor is giving the Franchisee permission to use their brand name, trademarks, and business system to operate a single franchise location. Think of it like getting a driver's license to operate a specific car model.

  2. Territory : This section outlines the exclusive area where the Franchisee can operate their business. It's like having a fishing spot where only you are allowed to fish, and no one else can fish there during the agreement period.

  3. Franchise Fee : This section details the fees the Franchisee must pay to the Franchisor, including an initial fee and ongoing royalty fees based on a percentage of the business's sales. It's like paying rent for using someone else's property and sharing a portion of your income with them.

  4. Franchisor's Support and Assistance : This section describes the support the Franchisor will provide to the Franchisee, such as training, manuals, and guidelines. It's like having a mentor who teaches you how to run the business and provides you with a playbook to follow.

  5. Term and Termination : This section specifies the length of the agreement and the conditions under which it can be terminated or renewed. It's like signing a lease for an apartment with a specific duration and conditions for ending the lease early or extending it.

  6. Governing Law : This section states that the agreement will be governed by the laws of the United States. It's like agreeing to play a game and following the rules set by a specific rulebook.

  7. Entire Agreement : This section clarifies that the agreement, along with any exhibits and amendments, is the complete agreement between the Franchisor and Franchisee. It's like saying that this document is the final and complete set of instructions for building a piece of furniture, and no other instructions will be provided.

  8. Execution : This section is where both parties sign the agreement, making it official and legally binding. It's like signing a contract to buy a house, making you the legal owner once the signatures are in place.

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