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One popular way to get started with your own business is through a franchise.  A franchise is a business organization in which a well-known firm with a successful product or service, the franchisor, enters into a contractual relationship with another business, the franchisee, that operates under the franchisor’s name in exchange for a fee.  Many fast food restaurants are commonly operated as franchises.

The franchise agreement is the legal and binding contract between a franchisor and franchisee.  This agreement outlines the terms and conditions of the franchisee.  It also outlines the obligations of the franchisor and the obligations of the franchisee.  This agreement is signed when an individual decides to enter the franchise system. As with any well-drafted contract, the franchise agreement needs to deal with some basic elements such as:

An Overview of the Relationship

This outlines the parties to the contract, the ownership of the intellectual property, and the overall obligations of the franchisee to operate the business to standards of the brand.

Duration of the Franchise Agreement

The term of the agreement as well as the franchisee’s successor rights to enter into new agreements.

Initial and Continuing Fees

Franchisees usually pay an initial and continuing fee to enter the franchisor system and to remain a franchisee.


The agreement must define how a territory is established. This also gives the franchisor the chance to reserve their rights within a franchisee’s territory.

Site Selection and Development

Generally the franchisee will find their own site and develop them according to the franchisor’s standards. The franchisor will need to approve the location and then, prior to opening, make sure that the location meets their design and brand standards.

Initial and Ongoing Training and Support

Franchisors generally provide a host of pre-opening and continuing training and support. In developing a proper set of franchise agreements, each of the elements of the franchise need to be properly evaluated.  Our qualified franchise lawyers will work with you to help ensure your long-term success.

Legal consultation with Choudhry & Franzoni Law Firm is only a phone call away. If you are thinking of buying or selling your franchise, call us now to have a qualified Franchise Lawyer help you in this process. Call Us Now at 212 - 529 - 8000.

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