Franchise Agreement Review

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,801 reviews

Jump to Section

Need help with a Franchise Agreement?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What Is a Franchise Agreement Review?

A franchise agreement is a legal document that establishes the terms and conditions between the franchisor and the franchisee. Therefore, a franchise agreement review is highly recommended to ensure you know exactly what you are getting into.

Franchising is a popular business choice for many people around the world. It allows would-be entrepreneurs to build a business using a proven formula and to provide customers with access to a brand they already know and trust.

However, while many franchise agreements are similar, most have widely varying requirements, expectations, and terms and conditions for the franchisee. Suppose franchisees don’t abide by the terms of their franchise agreement. In that case, they could be removed from the program – meaning they would no longer be able to use the name and branding of the franchisor.

Some franchise agreements might be too restrictive or heavily weighted in favor of the franchisor. This is why it’s important for people considering becoming a franchisee to have a professional franchise agreement review.

During a franchise agreement review, a lawyer or business specialist with a high level of knowledge of franchising will review the legal document provided by the franchisor and ensure that there are no clauses or restrictions that might put the franchisee at a disadvantage in terms of one or more facet of the business.

Here is an article that provides more information about franchises.

Key Terms in a Typical Franchise Agreement

Becoming a franchisee and being allowed to use the business model, brand, and franchisor is a complex process. There are many things that you will need to agree to. The franchise agreement will include a variety of terms and clauses, but some of the most important are:

  • Terms related to the use of the trademark, logo, and branding
  • The territory that you are allowed to operate in
  • Whether you are entitled to have a single location, many locations, or exclusive rights to a region or area
  • Standards, procedures, rights, and responsibilities of both the franchisor and the franchisee
  • The duration of the franchise agreement and what the procedure is to renew or extend the term
  • Payments that the franchisee will make to the franchisor
  • What kind of assistance in training, advertising, and operational procedures can the franchisee expect from the franchisor
  • When and how the franchisee or franchisor might terminate or transfer the franchise

These terms and conditions can vary widely from one franchisor to another. Some may be more flexible, while others have rigid or specific requirements. Therefore, it’s important to understand your franchise agreement and what kind of restrictions and rules you might face.

If a franchise agreement does not align with your needs or vision, you might need to look for another opportunity that is more suited to your needs.

Here is an article with a sample of clauses in a franchise agreement.

Meet some lawyers on our platform

Michael K.

58 projects on CC
View Profile

Anand A.

11 projects on CC
View Profile

Briana C.

43 projects on CC
View Profile

Max M.

105 projects on CC
View Profile

What is an FDD?

An FDD is a Franchise Disclosure Document. It sets out many of the terms, expectations, and requirements of the franchisor, such as:

  • Who the franchisor is, and who their key contacts are
  • Information about their franchise program, including their experience in managing a franchise program
  • Fees that franchisees are required to pay to join the franchise program and any ongoing fees and commissions on sales
  • Required investment, purchases, and property and location specifications for franchises
  • Territory rights for the franchisee
  • Information about other franchisees
  • Profitability data

Once the franchisee has received an FDD from a franchisor, they have a 14-day cooling-off period to review the document and decide if it’s the right opportunity. The FDD might also include contact information you can use if you have any other questions about the franchise program.

Here is an article to learn more about an FDD.

3 Types of Franchising

There are three main types of franchise:

  1. A master franchise agreement
  2. An area representative agreement
  3. An area development agreement

The primary difference between these agreements relates to where each franchisee may operate.

Who Should Review My Franchise Agreement?

Since a franchise agreement is a legal document, the best person to conduct a franchise agreement review is a lawyer who specializes in this facet of business law.

Lawyers with experience reviewing franchise agreements understand the terms and terminology used in this agreement and can spot potential problems quickly. For example, they can advise potential franchisees if the agreement they are considering is too restrictive or if the franchisor has too much control over their business and earning potential.

How Much Does It Cost to Review a Franchise Agreement?

The cost to review a franchise agreement varies widely from one law firm to another, so it’s a good idea to contact a few specializing in this type of law before deciding whom to trust with your franchise agreement review.

Most law firms who offer franchise agreement reviews will charge an hourly rate, and they will usually be able to give you some indication of how many hours they expect will be needed.

This is a small price to pay, though, and will be significantly cheaper than trying to get out of a lousy franchise agreement.

Common Legal Issues in Franchising

A franchise is a unique business relationship between the franchisor and franchisee, and there are many legal considerations you will have to weigh before choosing which franchise is right for you.

However, there are a few common legal issues that can make or break a franchise, such as:

  • What are your rights as a franchisee are
  • How transparent and honest the franchisor is about the business and profitability potential of the franchise
  • What kind of training and support will you receive, and how easy will it be to access
  • The upfront and ongoing costs related to the franchise
  • Non-competition agreement – including whether you can continue to run a similar business in the event your franchise agreement is terminated
  • Responsibilities related to site location and development – who will find the site for your franchise and equip it to operate?
  • The legal and business standing of the franchisor and their track record in the industry

These issues can profoundly affect your franchise business, so it’s important to take the time to understand them thoroughly.

What Can You Negotiate in a Franchise Agreement?

It’s not always possible to negotiate the terms of a franchise agreement, and often, the larger and more established the franchisor is, the less room for negotiation you will have.

However, there may be situations where you can negotiate various aspects of your franchise agreement, such as the upfront and ongoing fees and commissions you must pay, where you are allowed to operate, and what your territory will be.

You might also want to negotiate any franchise agreement terms that are too restrictive, including ongoing non-compete clauses.

It’s also a good idea to negotiate your renewal rights, get the most favorable deal, and ensure that the franchisor has limited rights to acquire your business should they choose to.

Many small details can make or break a franchise agreement, and it’s always a good idea to negotiate as much as you can so that it favors you as much as possible.

Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers for your project. All lawyers have been vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Keidi C. on ContractsCounsel
View Keidi
Member Since:
August 25, 2021

Keidi C.

Principal Attorney
Free Consultation
Get Free Proposal
Boston, MA
24 Yrs Experience
Licensed in MA, NY
New England Law | Boston

Keidi S. Carrington brings a wealth of legal knowledge and business experience in the financial services area with a particular focus on investment management. She is a former securities examiner at the United States Securities & Exchange Commission (SEC) and Associate Counsel at State Street Bank & Trust and has consulted for various investment houses and private investment entities. Her work has included developing a mutual fund that invested in equity securities of listed real estate investment trusts (REITs) and other listed real estate companies; establishing private equity and hedge funds that help clients raise capital by preparing offering materials, negotiating with prospective investors, preparing partnership and LLC agreements and advising on and documenting management arrangements; advising on the establishment of Initial Coin Offerings (ICOs/Token Offerings) and counseling SEC registered and state investment advisers regarding organizational structure and compliance. Ms. Carrington is a graduate of Johns Hopkins University with a B.A. in International Relations. She earned her Juris Doctorate from New England Law | Boston and her LL.M. in Banking and Financial Law from Boston University School of Law. She is admitted to practice in Massachusetts and New York. Currently, her practice focuses on assisting start ups, small and mid size businesses with their legal needs in the areas of corporate and securities law.

Jim S. on ContractsCounsel
View Jim
Member Since:
August 13, 2021

Jim S.

Free Consultation
Get Free Proposal
36 Yrs Experience
Licensed in NY
Notre Dame

Jim Slattery most recently served as General Counsel at Regional News Network, a large owner of broadcast television stations. Jim is an experienced attorney with broad-based expertise. He is a seasoned negotiator who has been involved in negotiations as complex as the Olympic Games. Jim spent 18 years as Vice President for Business and Legal Affairs at NBCUniversal. Previously, Jim worked in the media industry in various roles at All American Television. Jim’s success can be attributed to his ability to properly analyze data, manage projects, lead teams, develop creative solutions for complex problems, focus on strategically optimizing assets, manage/allocate risk and collaborate with divergent constituent groups to achieve objectives. Jim received a J.D. and a B.B.A. from the University of Notre Dame.

Namrita N. on ContractsCounsel
View Namrita
Member Since:
August 18, 2021

Namrita N.

Attorney at Law
Free Consultation
Get Free Proposal
Plano, TX
2 Yrs Experience
Licensed in MN, TX
Mitchell Hamline School of Law

Retired Dentist transitioned to Law, with a special interest in Commercial Real Estate, Startup businesses, Asset Purchase Agreements, and Employment Contracts. I love to help dentists and physicians with legal issues pertaining to licensing, credentialing, employment, and general business-legal questions.

Jonathan H. on ContractsCounsel
View Jonathan
Member Since:
September 18, 2021

Jonathan H.

Free Consultation
Get Free Proposal
New York
10 Yrs Experience
Licensed in NY
Pace Law School

I’m an attorney focusing my practice on concierge corporate and intellectual property law for startups and high-growth companies. I also serve as outside General Counsel to several businesses in various sectors. Since founding my practice I've worked with hundreds of clients across a variety of industries. My experience as a former General Counsel of a premier edtech company gives me unique insight into the challenges my clients face and how to resolve them efficiently and cost-effectively.

George F. on ContractsCounsel
View George
Member Since:
August 18, 2021

George F.

Free Consultation
Get Free Proposal
Astoria, NY
21 Yrs Experience
Licensed in NY
Fordham University School of Law

The Law Office of George K. Fuiaxis, from the very beginning in 2002, has built a reputation with its clients as an unmatched, diligent, hands on law practice that is always on duty to find the best course of action for its clients. With a supreme pledge of exceptional service to its clients in the areas of Real Estate (Commercial & Residential), Loan Modifications, Intellectual Property, Corporate Law & Business Transactions, Wills, Trusts & Estates, the Law Office of George K. Fuiaxis creates solutions for the many faceted problems faced by its clients. The office represents several various clients, including well known lending institutions, foreign and domestic corporations, sellers and buyers of residential and commercial real estate, residential and commercial landlords and tenants, well known restaurant and business owners, automobile dealerships, airline companies, well known fashion, sports and entertainment industry individuals and corporations, information technology (IT) startups and well known IT companies.

Chris J. on ContractsCounsel
View Chris
Member Since:
August 22, 2021

Chris J.

Outside Counsel
Free Consultation
Get Free Proposal
Irvine, CA
27 Yrs Experience
Licensed in CA
Loyola Law School, Los Angeles

I'm a business law generalist with over 24 years of experience, including as in-house General Counsel, as outside counsel through my own firm and as an attorney in an Am Law 100 law firm. My employers and clients uniformly appreciate my ability to (i) negotiate and close transactions quickly and effectively, and (ii) to make the complex simple. Among other things, I can efficiently assist you on entity formation, governance, and structure; HR issues; mergers and acquisitions; and the negotiation and drafting of all types of commercial contracts. I'm the proud recipient of multiple Martindale-Hubbell Client Distinction Awards given only to the top 5% of attorneys for quality of service.

Gregory W. on ContractsCounsel
View Gregory
Member Since:
August 23, 2021

Gregory W.

Business Attorney
Free Consultation
Get Free Proposal
Los Angeles
15 Yrs Experience
Licensed in CA
University of West Los Angeles

Strategic thinking business minded Outside General Counsel here to help you with your company. I have been able to help guide business owners from startup through series A, B, & C funding and ultimately IPO's. Regardless of your plans I am here to help you succeed as you grow your business.

Michael O. on ContractsCounsel
View Michael
Member Since:
February 14, 2022

Michael O.

Managing Attorney
Free Consultation
Get Free Proposal
Los Angeles
15 Yrs Experience
Licensed in CA, NY
University of Southern California

A corporate and commercial attorney with experience in transactional legal services including corporate and finance transactions, mergers and acquisitions, real estate, commercial contracts, bankruptcy, restructuring, international business transactions and general counsel services. Additional background skills and experience include investment banking, financial analysis, and commercial litigation. Sectors covered include technology, media, franchises, and business services providers, from start-ups to medium and large enterprises.

Daliah S. on ContractsCounsel
View Daliah
Member Since:
September 1, 2021

Daliah S.

Principal Attorney
Free Consultation
Get Free Proposal
Chicago, IL
18 Yrs Experience
Licensed in IL
University of Illinois College of Law

Daliah Saper operates a cutting-edge internet and social media law practice that regularly leads local and national media outlets to solicit her commentary on emerging internet law issues involving cyberbullying, sexting, catfishing, revenge porn, anonymous online defamation, domain name and user-name squatting, privacy, and the latest business decisions made by social media platforms such as Facebook, Twitter and YouTube. As a litigator Daliah represents companies bringing or defending business and intellectual property disputes. (She has argued cases in a number of jurisdictions including taking a case all the way to the Illinois Supreme Court.) As a transactional lawyer she helps clients choose the right business entity, drafts contracts and licensing agreements, advises on sweepstakes and contest rules, and ensures website terms of use and privacy policies are compliant, and provides comprehensive trademark and copyright counseling. Since founding Saper Law Offices in 2005, Daliah has been named a 40 Under 40 by Law Bulletin Publishing Co., a top Media & Advertising attorney by Super Lawyers Magazine 14 years in a row, and has been repeatedly recognized as a leading media and entertainment lawyer by Chambers and Partners. For the past eleven years, she also has taught entertainment and social media law at Loyola University Chicago School of Law.

Alex M. on ContractsCounsel
View Alex
Member Since:
August 26, 2021

Alex M.

Free Consultation
Get Free Proposal
Los Angeles, California
11 Yrs Experience
Licensed in CA
Southwestern Law School

Mr. Mehdipour attended the University of California San Diego where he received his degree in political science. After graduating from UCSD, Mr. Mehdipour attended Southwestern University School of Law where he received his JD. Upon passing the bar, Mr. Mehdipour gained invaluable experience both in a law firm and business setting. Mr. Mehdipour uses his prior business and legal experiences to negotiate the most advantageous results for his clients.

Alen A. on ContractsCounsel
View Alen
Member Since:
August 26, 2021

Alen A.

Free Consultation
Get Free Proposal
Los Angeles, CA
15 Yrs Experience
Licensed in CA
University of West Los Angeles

Alen Aydinian is a versatile attorney with over a decade of experience working with business owners and real estate professionals. Client engagement is central to a successful attorney/client relationship. Alen personally manages all client relationships so that his clients can see how their interests are being served at every stage of the process.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call