Franchise Agreement

A Franchise Agreement legally binds the Franchisor and Franchisee as terms and conditions are meticulously drafted and agreed. It also safeguards the Rights and Obligations of the parties.

As India does not have specific laws for Franchising so it is not mandatory to register a Franchise Agreement.

The Franchisee owes few obligations toward the Franchise after the expiration or termination of agreement. Discontinuation of Trademark use is a Post term obligation.
Often Post term obligations can give rise to disputes and litigation. Careful drafting of the Franchise Agreement could minimize the risks arising from post term obligations.

The Franchise Agreements are long term; duration of Franchise Agreement depends on the requirement of the parties. The typical duration of a Franchise Agreement is 10 years, but this can be mutually discussed and agreed.

ezyLegal can help you get your Franchise Agreement reviewed and provide you with the right legal guidance. You can upload your document and schedule your Consultation with an ezyLegal Lawyer.

ezyLegal offers Standard and Customised Document drafts. If you chose the Customised Document option, your call will be scheduled with a Lawyer to whom you can explain your specific requirements.

The first draft will be delivered within 2 working days and then you would be allowed 2 iterations to make changes in the draft.

The Document when ready, will be available on the ezyLegal website (www.ezylegal.in) in your secured Account. You will be notified on email and WhatsApp whenever a new version of the document is uploaded. You can Log-in and View or Download the document.

Copy of the final drafts will be available in your ezyLegal account forever.

A franchise agreement is one legal document that is mutually agreed upon by the franchisor and the franchisee. It binds both of them into carrying out legal obligations for each other. An ideal franchise agreement includes various terms such as remuneration, timeline, conditions for usage of brand name, etc.

This document legally forges the relationship between a franchisor and a franchisee. Without it, a lot of business-related threats, mishaps, and breaches could be committed both intentionally and inadvertently by all parties involved. The franchise agreement is what defines and details the franchise relationship.

Within a franchise agreement the franchisee is granted the legal right to establish a franchised outlet after the site selection and its operation wherein the franchisee, among other things, obtains the license and right to utilize the franchisors trademarks, trade dress, business systems, operations manual and sources of supply in offering. 

If a franchisor moves to close a franchise of an owner, it is probably because of a breach of this agreement. In fact, most franchise agreements include a clause that gives the franchise company the right to terminate it if the franchisee breaches the same provision more than twice within 12 months.

In franchise business,a franchise owner makes money through profits received from sales and service transactions. This is generally the left over amount of money received from revenue after overhead costs are taken out.

Franchise taxes do not replace central and state tax laws so it’s not an income tax. These are levies that are paid in addition to income taxes. They are usually paid annually at the same time other taxes are due. The amount of franchise tax can differ greatly depending on the state laws and tax rules within each state.

A small-business owner operates a franchise. In franchise system,the franchisee is required to pay a fee to the franchisor for the right to use the business’s already-established success, trademarks, and proprietary knowledge.The franchisee receives continuous guidance and support from the franchisor.

A initial franchise fee is an amount paid to enter into a franchise agreement. The franchise fee is paid by the franchisee to the franchisor.

Royalties are a percentage of the total revenue which is paid to the franchisor. Royalties can be paid either on a monthly or a yearly basis depending on the terms of the agreement.