question.jpgIn Business Law

What is a franchise agreement?

A franchise agreement is the contract you would enter into with the franchisor when you are finalizing the purchase of a franchise. It is the main contract outlining how the franchise relationship will work. Although you will generally not have much say in what actually goes in the agreement, you should review it carefully to make sure than anything the franchisor promised you is in the agreement (if it’s not, you will probably not be able to enforce the oral promise at a later time). You should also pay close attention to the financial terms in the agreement, particularly with regard to any fees you have to pay and any sales quotas that are in place (for example, if your business starts off slow and you fail to meet a sales quota, you could find yourself in a very difficult position early on in the life of your business).