Create a franchise agreement

Last updated 19 March 2019

Franchising involves licensing a well-developed business model to a third party. Fees and royalties are paid for the right to use the brand name, sell the product or service and use business systems and processes. This can include training and equipment.

You’ll need a well-developed business with an established brand and operating model to start a franchise. Returns can be lower than other routes to market but setup costs are relatively low and the model can be expanded quickly into many different markets.

Be selective when choosing a franchise partner. You’ll want to be confident that your product, service or IP will be used in the way you intended and that your standards will be maintained.

Set up a franchising agreement

Get specialist legal advice to set up a well thought out franchising agreement to protect your business.

Like licensing, franchise agreements are for a fixed amount of time and need to be renewed. They are usually longer than license agreements.

Monitoring quality and standards can be time consuming, particularly if you have several franchises in different countries. You’ll need to be aware of the legal requirements of each country and prepared for extra administrative work.