This is a basic franchise agreement, outlining the commercial relationship between a franchisor and a potential franchisee.

The provisions of a franchise agreement should be carefully considered as each transaction is often very specific in nature. It is therefore recommended to seek legal advice when preparing such an agreement. Certain legal issues regarding the commercial relationship should be handled with care, in particular:

• ownership of the various tangible and intangible assets involved in the delivery of goods or services to a customer via the franchise network;
• what rights need to be granted to the franchisee to allow this delivery;
• what rights need to be reserved to the franchisor;
• provisions regarding employment and premises;
• any legal restrictions affecting the business; and
• methods of payment.

What does the Franchise Agreement cover?

• the fees associated with the franchise;
• the application of the system manual;
• restrictions on the territory of the business;
• obligations on both parties to run a quality business;
• vehicles and equipment;
• marketing;
• confidential information;
• insurance;
• use of business name; and
• breach and dispute resolution.