The Franchise Agreement

Introduction

Signing a franchise agreement is a major commitment, and negotiating the right terms can impact your long-term success. While franchisors set standard agreements, strategic negotiation can help protect your interests. Here’s what to look for and how to negotiate like a pro.

1. Key Clauses to Focus On

Franchise Fees & Royalties

Understand the initial franchise fee and ongoing royalties. Negotiate lower upfront costs or phased payments if possible.

Territory Rights

Ensure you get exclusive territory to prevent market saturation. Ask for clear definitions of your operational boundaries.

Renewal & Exit Terms

Check contract renewal options and resale restrictions. Negotiate for fair exit terms in case you need to sell or exit the business.

Marketing Fees & Support

Clarify how advertising fees are used and whether franchisees have input on marketing strategies.

2. Negotiation Tips

• Hire a Franchise Attorney – Legal experts can spot red flags.

• Compare Multiple Franchises – Leverage competitive offers in negotiations.

• Ask for Flexibility – Some franchisors offer customized terms for high-potential franchisees.

Conclusion

A well-negotiated franchise agreement sets you up for success. Take your time, seek expert guidance, and ensure fair terms before signing.

Need help evaluating a franchise agreement? Contact us today for expert advice!