FRANCHISEE AGREEMENT

FRANCHISEE AGREEMENT

This is a form of an agreement which established a relationship between a reputed and well-established business, known as the franchisor, who decide to give its business’s operational model, brand and other support to another party, known as the franchisee. The agreement contains legal and professional or franchise terms and conditions that both the parties will have to abide by during the tenure.

WHAT ARE THE TYPES OF FRANCHISE AGREEMENT?

The different types of Franchise Agreement are:

Single Unit Franchise Agreement
Multi-Unit Franchise Agreement
Master Franchise Agreement

WHAT ARE THE ELEMENTS OF FRANCHISE AGREEMENT?

The key elements are:

Relationship of the parties
Duration of Agreement
Business Operations
Franchise Fee
Training and Support
Use of intellectual property
Territory or site selection
Insurance
Renewal of the franchise contract
Resale of franchise
Termination

WHAT IS THE DIFFERENCE BETWEEN LICENSE AND FRANCHISE?

The difference between license and franchise are as follows:

License	Franchise
In license, the business sells the right to use the intellectual property for royalty	In franchise, the business allows the franchisor to use the brand and business model to conduct business, for a fee.
Registration is not necessary	Registration is mandatory
Training and support is not provided in a license arrangement	Training and support is provided in a franchise arrangement
The licensor has control over the use on IP but no control on the licensee’s business	Franchisor has significant control on franchisee’s business
Royalties are subject to negotiation in a licensing arrangement	In franchise, the fees to be paid by the franchisor is usually standard.

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