In accordance with the franchise rule, the franchisor must provide the franchisee with a valid FDD at least two weeks before signing a franchise agreement or payment to the franchisor. Once the franchise agreement is in force, national law, which varies from state to state, applies. The company has the right to refuse to sell or transfer ownership of the franchise site for any reason. This Franchise Agreement governs [Owner.Name`s] license to operate an authorized franchise site under the aegis of [Franchise.Company]. The agreement shall apply from [contract.date] and shall apply for a period of [contract.years]. By signing this Agreement, both Parties acknowledge the understanding and approval of all the conditions mentioned above. The owner agrees to pay a deductible for the rights of ownership and operation of this franchised site. The payment amount is shown in the table below and includes all deposits, rebates and taxes related to this amount. A franchise agreement is concluded between a party owning a business, the franchisee, and a party wishing to invest and open a branch of the same business, the franchisee. We see examples of franchises everywhere and in all sectors. Known franchises are McDonald`s, Ben and Jerry`s, Hilton Hotels and Resorts and Toys “R” Us. The franchise rule requires the provision to a potential franchisee of a franchisee record document (FDD) describing twenty-three “items” related to the franchisee`s activities.
An FDD is intended to give potential franchisees a clear picture of the franchisee`s business, senior managers and other franchisees. Among the 23 elements needed, some include past or ongoing litigation regarding the franchise, the financial health of the franchise, training programs and other support programs made available to franchisees by the franchisee, the list of existing franchise outlets and the franchise`s trademarks, copyrights and patents. This franchise agreement is renewed from [renewal date]. Both parties have the option of renewing or terminating this franchise agreement on that date. The Owner also agrees to pay this business license fee up to [Dollar.Amount] per month, as agreed by both parties. Failure to pay royalties and/or royalties within an agreed period may lead to termination, seizure or withdrawal of the owner`s franchise license. Accordingly, the Owner agrees to surrender all rights to use the franchise`s intellectual property at the location indicated in this Franchise Agreement, including intellectual property, such as logos and signs.. . . .