Franchise Agreement

A franchise agreement lets a business owner, the franchisee, run an outlet under the brand and the working method of another company, the franchisor. The franchisee brings the premises, the staff and the money; the franchisor brings the brand, the know-how, the manuals and training. In return the franchisee pays an initial fee and then continuing fees, often a share of sales.

This template covers one outlet. It starts with the key terms: brand, address, territory and length of the term. The fee table lists each charge with a fixed amount, a percentage of gross sales, or both, says whether it is paid once, monthly or yearly, and works out the amounts for an example monthly sales figure so that both sides see what the percentages mean in money. The clauses cover the territory and whether it is protected, opening and training, brand standards, approved suppliers, records and inspection, marketing, ownership of the brand, non-competition, transfer of the outlet, renewal, termination and what happens at the end.

Franchising is one of the most regulated kinds of contract, and the rules differ by country. In the United States, Korea and Japan, the law (a federal rule in the US, a statute in Korea and Japan) requires the franchisor to hand over a disclosure document before the contract is signed; Germany has no franchise statute but strict duties to inform and a fairness review of standard terms. The form records what the franchisee received and when, and the country notes tell you which rules to check. The sales example is an illustration, not a forecast. This is a general template, not legal advice.

• You run a proven concept and want a written contract before the first franchisee opens.
• You are about to become a franchisee and want to read the main terms, fees and exit rules in plain language.
• You are converting a handshake arrangement with an outlet that already uses your brand.
• You want the fees and an example in money in one table that both sides can check.

1. Choose the country where the outlet is, and check the pre-contract disclosure rules named in its notes before giving or signing anything.
2. Enter franchisor and franchisee, the brand, the address of the outlet and the territory, and say whether the territory is protected.
3. Fill the fee table: for each charge enter a fixed amount, a percentage of gross sales or both, and when it is paid.
4. Enter an example monthly sales figure and read the totals to see what the fees mean in money.
5. Set opening time, training days, reporting day, non-competition, transfer and insurance terms, and the term with renewal.
6. Enter the date the franchisee received the pre-contract information, check law and courts, print and sign.

• Signing before the franchisee has had the disclosure document or the information the law requires.
• Presenting the example sales figure as an expected result rather than an illustration.
• Leaving the territory vague, so nobody can tell later whether a second outlet is allowed.
• Copying a long non-compete without checking that the law of the country allows it.
• Forgetting the costs the table does not show, such as fit-out, stock and deposits.
• Assuming the contract can take away rights that franchisees have by mandatory law.

1. Fill in
2. Check the preview
3. Save as PDF, Word or Excel

Pick the country you need. Each version uses the wording and layout commonly found there; a version marked “check with local advice” should be read by someone who knows the local rules before it is used.

• International (XX): Written in English, Korean, Japanese, German
• United States (US): Written in English – check with local advice
• Korea (KR): Written in Korean, English – check with local advice
• Japan (JP): Written in Japanese, English – check with local advice
• Germany (DE): Written in German, English – check with local advice