{"id":1545074,"date":"2026-02-20T17:29:10","date_gmt":"2026-02-20T16:29:10","guid":{"rendered":"https:\/\/lexpress-franchise.com\/en-us\/articles\/what-is-a-franchise-agreement\/"},"modified":"2026-02-04T15:07:30","modified_gmt":"2026-02-04T13:07:30","slug":"what-is-a-franchise-agreement","status":"publish","type":"post","link":"https:\/\/lexpress-franchise.com\/en-us\/articles\/what-is-a-franchise-agreement\/","title":{"rendered":"What Is a Franchise Agreement? Everything You Need To Know"},"content":{"rendered":"\n<p><strong>When you want to open a business with a proven strategy already in place, a franchise is the way to go. But first: you need a franchise agreement\u2014a standard legal document that governs the business relationship between the business that owns all the franchise locations and the franchisee who wants to run one of them.&nbsp;<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-230b27314cb6d08106c6f63cf6fdd263\">Franchise agreements explained<\/h2>\n\n\n\n<p>The <strong><a href=\"https:\/\/lexpress-franchise.com\/en-us\/articles\/what-is-a-franchise\/\">franchise<\/a><\/strong> <strong>agreement<\/strong> is the legal <strong>contract<\/strong> between the main operating business (<strong>franchisor<\/strong>) and the franchisee. It gives <strong>franchisees<\/strong> the right to operate a location of the <strong>business<\/strong> in their area. Franchisees are then responsible for initial <strong>fees<\/strong> and ongoing <strong>royalty<\/strong> payments to the franchisor. The agreement outlines brand and <strong>operating<\/strong> <strong>standards<\/strong> for them to adhere to.\u00a0<\/p>\n\n\n\n<p>It also ensures that <strong>franchisees<\/strong> will adhere to the <strong>marketing<\/strong> and brand <strong>standards<\/strong> of the main business. Like any contract, the franchise agreement outlines a <strong>business<\/strong> <strong>relationship<\/strong> between two parties. Before signing, you can master the <strong>basics<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-c943e04e2a6a6ee94d30429b8e98c194\">What information is included in a franchise agreement?<\/h2>\n\n\n\n<p>The common <strong>standards<\/strong> across franchise <strong>agreements<\/strong> are about how the overall <strong>business<\/strong> wants their locations to run.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Franchise agreement format and structure<\/h3>\n\n\n\n<p>A franchise agreement sets up the formal processes of your business. It includes an outline of the following information:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Opening date and territory: <\/strong>when you are expected to open the business and the geographical area you\u2019ll be serving (that won\u2019t compete with other locations of the franchise)<\/li>\n\n\n\n<li><strong>Fees and royalties expected: <\/strong>the initial cost you\u2019ll have to pay to license the business, as well as ongoing royalties to factor into your budget<\/li>\n\n\n\n<li><strong>Accounting and reporting requirements: <\/strong>the financial records you\u2019ll have to send to the franchise business owners and how often you\u2019ll have to send them&nbsp;<\/li>\n\n\n\n<li><strong>Advertising and marketing:<\/strong> signage, design, advertising placement, and more information about marketing your business<\/li>\n\n\n\n<li><strong>Operations and staff training guidelines: <\/strong>how to conduct new hire training and recommendations about staffing your business<\/li>\n\n\n\n<li><strong>Duration:<\/strong> how long the agreement is in place for and how long your license to operate the franchise lasts&nbsp;<\/li>\n\n\n\n<li><strong>Grounds for termination and post-termination requirements: <\/strong>the reasons the business relationship could be ended by the franchisor (like missing royalty payments)<\/li>\n\n\n\n<li><strong>Overall compliance with the law and standards of the business: <\/strong>legal requirements to adhere to and overall quality standards of the business&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Fees and royalties<\/h3>\n\n\n\n<p>A <strong>franchise<\/strong> <strong>agreement<\/strong> is more than a money in, money out <strong>operation<\/strong>. First and foremost, franchise agreements state that the <strong>franchisee<\/strong> has to pay the franchisor an <strong>initial<\/strong> <strong>franchise<\/strong> <strong>fee<\/strong>. That initial fee can be anywhere from around ten thousand <strong>dollars<\/strong> to hundreds of thousands or more. The fee allows you as the franchisee to do <strong>business<\/strong>, but you\u2019ll also have to have available <strong>cash<\/strong> to set up the business <strong>location<\/strong>. If you\u2019re franchising a <a href=\"https:\/\/lexpress-franchise.com\/en-us\/articles\/how-to-open-a-restaurant\/\">restaurant<\/a>, this means <strong>renting<\/strong> a building, securing <strong>equipment<\/strong>, and anything else needed to <strong>operate<\/strong> the business.&nbsp;<\/p>\n\n\n\n<p>The franchise agreement also includes <strong>royalties<\/strong> that the franchisor charges based on your weekly or monthly <strong>revenue<\/strong>. They can range from around 4% to 12% of the <strong>revenue<\/strong>, or they may operate on a fixed fee. The franchisor is invested in your <strong>success<\/strong>, and the name <strong>recognition<\/strong> carries a lot of weight for a newly opened business. In some cases, <strong>franchises<\/strong> that invest heavily in <strong>marketing<\/strong> also charge an <strong>advertising<\/strong> <strong>fee<\/strong>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-bfd046cffc03ab4146641e1864e0b7d6\">How does a franchise agreement work?<\/h2>\n\n\n\n<p>Moving forward with a <strong>franchise<\/strong> <strong>agreement<\/strong>, shared responsibility for the business is a huge consideration. The franchise agreement ensures that your new <strong>location<\/strong> representing their <strong>business<\/strong> does so in alignment with their <strong>corporate<\/strong> <strong>standards<\/strong>. A franchisee\u2019s responsibility to the franchisor is not only <strong>royalty<\/strong> <strong>payments<\/strong>, but also smooth business <strong>operations<\/strong> and high corporate <strong>standards<\/strong>.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What items are delineated in a franchise agreement?<\/h3>\n\n\n\n<p>The most <strong>important<\/strong> items delineated in a franchise agreement are usually the <strong>length<\/strong> of the agreement and the various <strong>standards<\/strong> of the business (fees, upkeep, brand).&nbsp;&nbsp;<\/p>\n\n\n\n<p>The <strong>length<\/strong> of the agreement can be anywhere from a few years to twenty. It\u2019s like leasing a car. If you operate the business well, you can probably get a longer-term <strong>contract<\/strong> when it comes time for renewal.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Termination of a franchise agreement<\/h3>\n\n\n\n<p>Sometimes, the <strong>franchise<\/strong> doesn\u2019t work out. Any franchise agreement will have an outline for what would constitute a <strong>breach<\/strong> of the agreement. These are a few reasons the <strong>franchisor<\/strong> might <strong>terminate<\/strong> the agreement with the <strong>franchisee<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Failure to pay royalties<\/li>\n\n\n\n<li>Failure to operate to franchisor business standards&nbsp;<\/li>\n\n\n\n<li>Loss of a lease or business license&nbsp;<\/li>\n\n\n\n<li>Criminal convictions<\/li>\n\n\n\n<li>Bankruptcy of owner&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>As a <strong>franchisee<\/strong>, you can seek to <strong>end<\/strong> the <strong>relationship<\/strong> with the <strong>franchisor<\/strong>. Standard <strong>reasons<\/strong> that would allow a franchisee to <strong>end<\/strong> the <strong>agreement<\/strong> include:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Franchisor does not offer adequate training<\/li>\n\n\n\n<li>Franchise business misrepresents profits and earnings&nbsp;<\/li>\n\n\n\n<li>Franchise business allows a new location to open up that overlaps with your territory&nbsp;<\/li>\n\n\n\n<li>Bankruptcy of business&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The <strong>standard<\/strong> in franchise agreements is to provide written notice to the franchise of your <strong>intention<\/strong> <strong>to<\/strong> <strong>end<\/strong> the agreement. Ending the agreement early is <strong>possible<\/strong>, but complicated. A <strong>franchise<\/strong> <strong>lawyer<\/strong> could help you with the process of <strong>finding<\/strong> <strong>a<\/strong> <strong>buyer<\/strong> for your franchise location and agreement.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-2842c5feb0c3f7797205addcc90f839b\">Model franchise agreement: what to know before using one&nbsp;<\/h2>\n\n\n\n<p>There are a ton of <strong>model<\/strong> franchise agreements <strong>available<\/strong> online. The models usually <strong>include<\/strong> <strong>everything<\/strong> we\u2019ve listed above, but also include more <strong>detail<\/strong> about running the <strong>business<\/strong> and maintenance expectations for the <strong>franchisee<\/strong>.&nbsp;<\/p>\n\n\n\n<p>More specific <strong>information<\/strong> you\u2019ll find in a <strong>model<\/strong> franchise <strong>agreement<\/strong>:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recommended suppliers and stocking requirements&nbsp;<\/li>\n\n\n\n<li>Trademark usage requirements&nbsp;<\/li>\n\n\n\n<li>Supplementary staff training for any staff looking to go into the corporate side of the franchise<\/li>\n<\/ul>\n\n\n\n<p><strong>Before<\/strong> <strong>signing<\/strong> a franchise agreement, make sure you\u2019re familiar with all <strong>expectations<\/strong> on you as the <strong>franchisee<\/strong>. Also, if the franchise <strong>agreement<\/strong> is missing anything crucial like the <strong>royalty<\/strong> <strong>payment<\/strong> expectation or <strong>termination<\/strong> clauses, return it to the franchisor with <strong>questions<\/strong>.&nbsp;<\/p>\n\n\n<div class=\"lf-gut-blog-post-cta-efference\" style=\"border-color: var(--primary);\"><div class=\"lf-gut-blog-post-cta-efference__icon\" style=\"color: var(--primary);\"><svg class=\"icon-thumb-up\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"35\" height=\"35\" viewBox=\"0 0 48 48\" fill=\"none\" style=\"color: var(--primary);\"><path fill=\"currentColor\" d=\"M21.4998 4.89989L20.8499 4.13985L20.8474 4.14202L21.4998 4.89989ZM26.5397 4.89989L27.1922 4.14197L27.1842 4.13526L26.5397 4.89989ZM29.6998 7.62011L30.3547 6.86441L30.3522 6.86223L29.6998 7.62011ZM40.4197 18.3401L41.1776 17.6877L41.1754 17.6851L40.4197 18.3401ZM43.1398 21.5L43.8998 20.8501L43.8977 20.8476L43.1398 21.5ZM43.1398 26.54L43.8977 27.1924L43.9044 27.1845L43.1398 26.54ZM40.4197 29.6999L41.1754 30.3549L41.1776 30.3523L40.4197 29.6999ZM29.6998 40.4199L30.3521 41.1778L30.3547 41.1756L29.6998 40.4199ZM26.5397 43.1399L27.1896 43.8999L27.1921 43.8978L26.5397 43.1399ZM21.4998 43.1399L20.8474 43.8978L20.8553 43.9045L21.4998 43.1399ZM18.3398 40.4199L17.6849 41.1756L17.6874 41.1778L18.3398 40.4199ZM7.57978 29.6999L8.34803 29.0597L8.34206 29.0527L7.57978 29.6999ZM4.87977 26.52L4.11427 27.1635L4.11748 27.1672L4.87977 26.52ZM4.87977 21.52L4.11747 20.8728L4.11428 20.8766L4.87977 21.52ZM7.57978 18.3401L8.3421 18.9873L8.348 18.9803L7.57978 18.3401ZM18.3398 7.62011L17.6874 6.86223L17.6849 6.86442L18.3398 7.62011ZM22.6797 31.88L23.3869 31.1729L23.3416 31.1276L23.291 31.0886L22.6797 31.88ZM30.6198 30.4801L29.6694 30.1688L29.6583 30.2028L29.6496 30.2375L30.6198 30.4801ZM32.8597 23.64L31.917 23.3064L31.9131 23.3175L31.9094 23.3288L32.8597 23.64ZM26.3998 20.0802L25.4113 19.9286L25.4089 19.9442L25.407 19.9598L26.3998 20.0802ZM26.8597 17.0802L25.8819 16.8706L25.8758 16.8995L25.8713 16.9286L26.8597 17.0802ZM25.6398 15.0201L25.2859 15.9554L25.3046 15.9625L25.3235 15.9688L25.6398 15.0201ZM23.5798 15.68L22.7523 15.1185L22.7504 15.1213L23.5798 15.68ZM22.1496 5.65993C23.1528 4.80216 24.8649 4.79607 25.8953 5.66452L27.1842 4.13526C25.4146 2.64371 22.6067 2.63762 20.8499 4.13986L22.1496 5.65993ZM25.8873 5.65777L29.0474 8.37799L30.3522 6.86223L27.1921 4.14201L25.8873 5.65777ZM29.0448 8.3758C29.4608 8.73632 30.0056 9.02413 30.5348 9.22184C31.064 9.41956 31.6657 9.56005 32.2197 9.56005V7.56005C31.9738 7.56005 31.6155 7.49056 31.2347 7.34832C30.8539 7.20605 30.5387 7.0239 30.3547 6.86442L29.0448 8.3758ZM32.2197 9.56005H35.6198V7.56005H32.2197V9.56005ZM35.6198 9.56005C37.1875 9.56005 38.4797 10.8522 38.4797 12.4199H40.4797C40.4797 9.74759 38.292 7.56005 35.6198 7.56005V9.56005ZM38.4797 12.4199V15.8201H40.4797V12.4199H38.4797ZM38.4797 15.8201C38.4797 16.3655 38.6209 16.9672 38.8174 17.4959C39.0139 18.0247 39.3014 18.5765 39.6641 18.995L41.1754 17.6851C41.0181 17.5036 40.8356 17.1854 40.6921 16.7993C40.5486 16.4129 40.4797 16.0547 40.4797 15.8201H38.4797ZM39.6619 18.9925L42.3819 22.1524L43.8977 20.8476L41.1776 17.6877L39.6619 18.9925ZM42.3797 22.1499C43.2375 23.153 43.2436 24.8652 42.3751 25.8956L43.9044 27.1845C45.396 25.4149 45.402 22.607 43.8998 20.8501L42.3797 22.1499ZM42.3819 25.8876L39.6619 29.0476L41.1776 30.3523L43.8977 27.1924L42.3819 25.8876ZM39.6641 29.045C39.3035 29.461 39.0157 30.0058 38.818 30.535C38.6203 31.0642 38.4797 31.6659 38.4797 32.22H40.4797C40.4797 31.974 40.5492 31.6157 40.6915 31.2349C40.8338 30.8541 41.0159 30.5389 41.1754 30.3549L39.6641 29.045ZM38.4797 32.22V35.6201H40.4797V32.22H38.4797ZM38.4797 35.6201C38.4797 37.1878 37.1875 38.48 35.6198 38.48V40.48C38.292 40.48 40.4797 38.2924 40.4797 35.6201H38.4797ZM35.6198 38.48H32.2197V40.48H35.6198V38.48ZM32.2197 38.48C31.6744 38.48 31.0726 38.6211 30.544 38.8176C30.0152 39.014 29.4633 39.3015 29.0448 39.6642L30.3547 41.1756C30.5362 41.0183 30.8544 40.8358 31.2405 40.6923C31.6269 40.5488 31.9851 40.48 32.2197 40.48V38.48ZM29.0474 39.662L25.8874 42.382L27.1921 43.8978L30.3521 41.1778L29.0474 39.662ZM25.8899 42.3798C24.8867 43.2376 23.1746 43.2437 22.1442 42.3753L20.8553 43.9045C22.6249 45.3961 25.4328 45.4021 27.1896 43.8999L25.8899 42.3798ZM22.1521 42.382L18.9922 39.662L17.6874 41.1778L20.8474 43.8978L22.1521 42.382ZM18.9947 39.6642C18.5787 39.3037 18.0339 39.0159 17.5047 38.8182C16.9755 38.6205 16.3738 38.48 15.8198 38.48V40.48C16.0657 40.48 16.4241 40.5495 16.8048 40.6917C17.1856 40.834 17.5008 41.0161 17.6849 41.1756L18.9947 39.6642ZM15.8198 38.48H12.3597V40.48H15.8198V38.48ZM12.3597 38.48C10.792 38.48 9.49976 37.1878 9.49976 35.6201H7.49976C7.49976 38.2924 9.6875 40.48 12.3597 40.48V38.48ZM9.49976 35.6201V32.1999H7.49976V35.6201H9.49976ZM9.49976 32.1999C9.49976 31.6539 9.35826 31.0572 9.16508 30.5353C8.9714 30.0121 8.69178 29.4723 8.348 29.0598L6.81156 30.3401C6.96777 30.5276 7.14815 30.8478 7.28945 31.2296C7.43127 31.6127 7.49976 31.966 7.49976 32.1999H9.49976ZM8.34206 29.0527L5.64205 25.8728L4.11748 27.1672L6.81749 30.3472L8.34206 29.0527ZM5.64525 25.8766C4.79794 24.8685 4.79794 23.1715 5.64525 22.1635L4.11428 20.8766C2.64159 22.6285 2.64159 25.4115 4.11428 27.1635L5.64525 25.8766ZM5.64205 22.1672L8.34206 18.9873L6.81749 17.6928L4.11748 20.8728L5.64205 22.1672ZM8.348 18.9803C8.69178 18.5677 8.9714 18.028 9.16508 17.5047C9.35826 16.9828 9.49976 16.3861 9.49976 15.8401H7.49976C7.49976 16.074 7.43127 16.4273 7.28945 16.8104C7.14815 17.1922 6.96777 17.5124 6.81156 17.6999L8.348 18.9803ZM9.49976 15.8401V12.4199H7.49976V15.8401H9.49976ZM9.49976 12.4199C9.49976 10.8522 10.792 9.56005 12.3597 9.56005V7.56005C9.6875 7.56005 7.49976 9.74759 7.49976 12.4199H9.49976ZM12.3597 9.56005H15.8198V7.56005H12.3597V9.56005ZM15.8198 9.56005C16.3651 9.56005 16.9669 9.4189 17.4956 9.22247C18.0244 9.02599 18.5762 8.7385 18.9947 8.3758L17.6849 6.86442C17.5034 7.02171 17.1852 7.2042 16.799 7.34769C16.4127 7.49123 16.0544 7.56005 15.8198 7.56005V9.56005ZM18.9922 8.37798L22.1522 5.65777L20.8474 4.14202L17.6874 6.86224L18.9922 8.37798ZM19.1685 30.4314L22.0685 32.6714L23.291 31.0886L20.3911 28.8486L19.1685 30.4314ZM21.9726 32.5871C22.3408 32.9552 22.8395 33.1544 23.2304 33.2648C23.645 33.3819 24.0864 33.44 24.4598 33.44V31.44C24.2731 31.44 24.0145 31.4081 23.7741 31.3401C23.6565 31.3069 23.5592 31.2695 23.4859 31.233C23.4093 31.1948 23.3839 31.1699 23.3869 31.1729L21.9726 32.5871ZM24.4598 33.44H27.9998V31.44H24.4598V33.44ZM27.9998 33.44C28.799 33.44 29.5865 33.1456 30.2139 32.6881C30.842 32.2301 31.3818 31.5549 31.5899 30.7226L29.6496 30.2375C29.5777 30.5252 29.3675 30.83 29.0356 31.072C28.7031 31.3145 28.3205 31.44 27.9998 31.44V33.44ZM31.5701 30.7913L33.8101 23.9512L31.9094 23.3288L29.6694 30.1688L31.5701 30.7913ZM33.8025 23.9735C34.1312 23.0445 34.0165 22.0828 33.4742 21.3419C32.9352 20.6053 32.0571 20.2 31.0798 20.2V22.2C31.5024 22.2 31.7444 22.3647 31.8603 22.5231C31.973 22.6772 32.0483 22.9354 31.917 23.3064L33.8025 23.9735ZM31.0798 20.2H27.3398V22.2H31.0798V20.2ZM27.3398 20.2C27.3373 20.2 27.3416 20.1997 27.3504 20.2035C27.359 20.2074 27.3692 20.2142 27.3782 20.2243C27.3876 20.235 27.3914 20.2444 27.3923 20.2472C27.3932 20.2503 27.3881 20.2367 27.3925 20.2005L25.407 19.9598C25.2548 21.2156 26.1799 22.2 27.3398 22.2V20.2ZM27.3882 20.2317L27.8482 17.2317L25.8713 16.9286L25.4113 19.9286L27.3882 20.2317ZM27.8375 17.2897C28.1304 15.9229 27.2511 14.5031 25.956 14.0714L25.3235 15.9688C25.7084 16.0971 25.949 16.5575 25.8819 16.8706L27.8375 17.2897ZM25.9937 14.0848C25.3555 13.8433 24.6881 13.9027 24.1473 14.0902C23.612 14.2757 23.0868 14.6256 22.7523 15.1185L24.4072 16.2415C24.4528 16.1744 24.5875 16.0543 24.8023 15.9799C25.0114 15.9074 25.1841 15.9169 25.2859 15.9554L25.9937 14.0848ZM22.7504 15.1213L18.9104 20.8212L20.5691 21.9387L24.4091 16.2387L22.7504 15.1213ZM15.9998 29.6399V20.48H13.9998V29.6399H15.9998ZM15.9998 20.48C15.9998 20.2144 16.0287 20.0485 16.0604 19.9495C16.0888 19.8605 16.1152 19.837 16.121 19.8316C16.1424 19.812 16.2914 19.7 16.8798 19.7V17.7C16.1482 17.7 15.3571 17.8179 14.7685 18.3583C14.1585 18.9183 13.9998 19.7102 13.9998 20.48H15.9998ZM16.8798 19.7H17.8198V17.7H16.8798V19.7ZM17.8198 19.7C18.3941 19.7 18.5477 19.8104 18.574 19.8344C18.5776 19.8376 18.6998 19.9386 18.6998 20.48H20.6998C20.6998 19.7014 20.532 18.9123 19.9205 18.3556C19.3318 17.8195 18.5455 17.7 17.8198 17.7V19.7ZM18.6998 20.48V29.6399H20.6998V20.48H18.6998ZM18.6998 29.6399C18.6998 30.1755 18.5805 30.2788 18.5752 30.2838C18.5511 30.3061 18.3996 30.4199 17.8198 30.4199V32.4199C18.56 32.4199 19.3484 32.2937 19.9343 31.751C20.539 31.191 20.6998 30.4043 20.6998 29.6399H18.6998ZM17.8198 30.4199H16.8798V32.4199H17.8198V30.4199ZM16.8798 30.4199C16.2914 30.4199 16.1424 30.3079 16.121 30.2883C16.1152 30.2829 16.0888 30.2593 16.0604 30.1704C16.0287 30.0714 15.9998 29.9055 15.9998 29.6399H13.9998C13.9998 30.4097 14.1585 31.2015 14.7685 31.7616C15.3571 32.302 16.1482 32.4199 16.8798 32.4199V30.4199Z\"\/><\/svg><\/div><h3 class=\"lf-gut-blog-post-cta-efference__title lf-transform-none\">Franchise agreement vs. franchise disclosure document<\/h3><div class=\"lf-gut-blog-post-cta-efference__lede\">\n<div class=\"wp-block-lexpress-highlighted-text-v2 lf-gut-blog-post-cta-efference__lede\">\n<p>A franchise agreement is the contract between the franchisor and franchisee. It\u2019s a legal document that outlines the operating procedures between you as the one responsible for operating a franchise location and the overall business, with the terms and standards outlined above.<\/p>\n\n\n\n<p>A franchise disclosure document is a document with information about the franchise to help you make your decision. It is a legal document franchisors must provide to franchisees seeking a franchise agreement, with important information about the franchise.<br><br><strong>What you\u2019ll find in a franchise disclosure document:<\/strong>&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The background of the franchisor&nbsp;<\/li>\n\n\n\n<li>Background of other businesses in the franchise<\/li>\n\n\n\n<li>A history of litigation<\/li>\n\n\n\n<li>Bankruptcy claims from the past<\/li>\n\n\n\n<li>Initial and ongoing costs<\/li>\n\n\n\n<li>Supplier, territory, and customer restrictions&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>According to the Franchise Rule enforced by the FTC in the United States, a franchisee must receive a franchise disclosure document (FDD) from the franchisor at least 14 days before signing. This gives the franchisee the opportunity to review this carefully and understand what kind of business they\u2019ll be able to do.&nbsp;<\/p>\n<\/div>\n<\/div><\/div>\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-d222c82418ba35b6084ba9661fe28147\">Do you need a franchise agreement lawyer?<\/h2>\n\n\n\n<p>When in <strong>doubt<\/strong>, consult the <strong>experts<\/strong>. A franchise agreement <strong>attorney<\/strong> can help you <strong>understand<\/strong> the context in terms of what you\u2019re <strong>responsible<\/strong> for as the franchisee and what the <strong>franchisor<\/strong> expects of you.&nbsp;<\/p>\n\n\n\n<p>The franchise agreement <strong>lawyer<\/strong> can also help you get all your <strong>documentation<\/strong> in place. They\u2019ll assist you in <strong>evaluating<\/strong> the startup <strong>costs<\/strong> and understand what <strong>profits<\/strong> you\u2019ll want to target for your <strong>budget<\/strong> (including paying royalties, employees, and keeping the business running).&nbsp;<\/p>\n\n\n\n<p>Another early <strong>relationship<\/strong> you can consider is an <strong>accountant<\/strong> familiar with franchise agreements. The <strong>attorney<\/strong> and <strong>accountant<\/strong> will help you keep on top of the <strong>financial<\/strong> risk and <strong>benefits<\/strong> of your franchise <strong>operation<\/strong>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-primary-color has-text-color has-link-color wp-elements-ea88ab21de786851153b8c2f2c866291\">Starting your franchise<\/h2>\n\n\n\n<p>Once you\u2019ve <strong>reviewed<\/strong> everything and have all your <strong>documentation<\/strong> in place for your <strong>business<\/strong> and with the <strong>franchisor<\/strong>, you\u2019re ready to get started.&nbsp;&nbsp;<\/p>\n\n\n\n<p>If you have an <strong>entrepreneurial<\/strong> <strong>spirit<\/strong> and want to get a business off the ground <strong>quickly<\/strong>, the <strong>investment<\/strong> in a <strong>franchise<\/strong> could be the right move.&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<p><em>This content is provided for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations vary by state and individual circumstances and may change over time. Readers should consult a qualified attorney, tax professional, or other licensed professional regarding their specific situation. Nothing herein creates an attorney-client relationship.<\/em><br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you want to open a business with a proven strategy already in place, a franchise is the way to go. But first: you need a franchise agreement\u2014a standard legal document that governs the business relationship between the business that owns all the franchise locations and the franchisee who wants to run one of them.&nbsp; [&hellip;]<\/p>\n","protected":false},"author":750,"featured_media":1545091,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"What is a franchise agreement? Everything you need to know","_seopress_titles_desc":"When you want to open a business with a proven strategy already in place, a franchise is the way to go. But first: you need a franchise agreement.","_seopress_robots_index":"","content-type":"","_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1541434","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3594,3596,3598,3599,3600,3607],"tags":[],"type-de-post":[438],"class_list":{"0":"post-1545074","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-franchise-networks","8":"category-market-entry","9":"category-understanding-franchising","10":"category-getting-started","11":"category-legal","12":"category-entrepreneurship","13":"type-de-post-articles"},"acf":[],"_links":{"self":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1545074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/users\/750"}],"replies":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/comments?post=1545074"}],"version-history":[{"count":5,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1545074\/revisions"}],"predecessor-version":[{"id":1566240,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1545074\/revisions\/1566240"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/media\/1545091"}],"wp:attachment":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/media?parent=1545074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/categories?post=1545074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/tags?post=1545074"},{"taxonomy":"type-de-post","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/type-de-post?post=1545074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}