When you have made the decision to look at franchising as a career option, the next steps are important. You need to find a franchise consultant to help you wade through the thousands of franchise opportunities available. You need to then discover what industry would be a good fit for you. And finally, you need to make sure that the franchisor you are going with is the right choice for you.

Once you get through all of that, and you are ready to sign on the dotted line, there is one final piece of the puzzle to understand.

What Is A Franchise Agreement?

This is the binding legal document between a franchisor and a franchisee, and it spells out everything. It is the document that allows you to use all the resources that the franchisor has to offer. Let us take a minute and look at the different elements of the Agreement.

Franchise and Royalty Fees

The initial franchise license fee, and any future fees and royalties to be paid, will be fully disclosed here. Franchisees are often personally liable for paying royalties, which could make breaking an agreement very costly.

Trade Name and Method of Operations

You will be given the rights to use the branding that goes along with the franchise. You will also be guaranteed the use of any marketing, proprietary information, and other processes that the franchisor has developed over the years to help its franchisees become successful.

Length of Agreement

Most Franchise Agreements last for 5 to 10 years. It will include the provisions for agreement renewal. Most franchise companies allow for renewals, at the end of your initial term, as long as the franchisee is in good standing with the company.


This is a particularly important part of your Franchise Agreement. It lays out the territory that will belong to you and forbids other franchisees with the same franchisor from doing business within that designated area. Some franchisors allow a franchisee to purchase multiple territories, either at the initial signing or in the future, which would allow you to build and expand your franchise empire.


This is the part of the agreement that would lay out the process for transferring the franchise to a new franchisee if you sell your business, or even to an inheritor as part of your estate.

These are some of the more important sections in a Franchise Agreement. One piece of advice we can give is to make sure you get legal advice. Your franchise consultant can help you with that.

Negotiating Your Franchise Agreement

And on a final note, some aspects of your Agreement may be negotiable. Ask your franchise consultant and your legal advisor what may be best for you to negotiate.

Starting your new franchised business is an exciting time, but it is especially important to stay focused as you go through the steps. This will help assure you get the best deal possible, along with the best possible path to business ownership success.

Franchise Matchmakers is a team of franchising professionals that are dedicated to helping people explore business ownership as a career path. Contact them at  info@franchisematchmakers.com to find out more about franchising options that are perfect for you.

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