Franchise agreement meaning

This Checklist outlines the practical considerations for a franchisor when launching an international franchise. A franchisor may wish to grow its network abroad to tap new territories and emerging markets, usually by entering into an international franchise agreement or an international development agreement. Nevertheless, the agreement and the structuring of the international arrangement can also present challenges and complications. This Checklist identifies some of the practical issues that a franchisor planning to expand overseas might encounter. Issues The franchise agreement will state that the franchisee must run the business in line with the franchisor’s operations manual. However, the business method described in that manual may not have been piloted or proven in the overseas territory. It will have been devised on assumptions tailored to the local market. A franchisee may therefore struggle to implement the method in the overseas territory if reliant on those assumptions. A franchisee is often contractually obliged to use the marketing material supplied by the franchisor under the agreement...

This Checklist sets out the issues that should be considered for inclusion in a franchising operations manual The franchise operations manual captures the real-world execution of the franchisor’s system, describing the tasks the franchisee must carry out and the support it can anticipate from the franchisor. Under the franchise agreement, the franchisee is bound to follow the manual to the letter, a discipline widely recognised as driving commercial success. The franchisee will typically consult it daily, particularly during the early phase of trading. The manual might be prepared by the franchisor, or by an independent consultant working with the franchisor’s input. If an outside consultant is engaged, the franchisor must be satisfied that the consultant understands the franchise business. Without that familiarity, the manual may fail to address risks and other essential points that require attention, which could leave the franchisor vulnerable and create further exposure for the franchisor...

A checklist to capture instructions from either a franchisor or a franchisee in relation to a proposed franchise agreement, covering parties, general matters and background. PARTIES Full legal name and full postal address of the franchisor If the franchisor is a limited company, please state its registered office address, company registration number and accounting reference date If the franchisor is not incorporated, on what date are its accounts prepared each year? Will franchisees operate as sole traders, traditional partnerships, LLPs, or limited companies? Is a guarantor required for the franchisees’ obligations under the agreement? Where franchisees are companies, does the franchisor insist on a personal guarantee from the principal shareholder, to secure recovery of any potential losses or damages? Must the franchise be owner-run, or is it intended as a management model? GENERAL Brief outline of the franchisor’s business, and the proposed franchise activity if different For how long has the franchisor carried...

Aroma Franchise Company, Inc v Aroma Espresso Bar Canada Inc. 2024 ONCA 839 What are the practical implications of this case? The ruling confirms that, unless the parties stipulate otherwise in their arbitration clause, the Model Law’s objective yardstick governs both arbitrators’ disclosure duties and their potential disqualification in international arbitrations seated in Ontario. In the absence of express agreement to the contrary, that objective benchmark is the applicable test. As the Model Law is embedded in the international commercial arbitration statutes of every other Canadian province, and incorporated into the provisions of the Code of civil procedure of Québec, the judgment carries significance across Canada and will be relevant nationwide. The Court further determined that the application judge erred in relying on pre‑appointment communications between the parties to find a reasonable apprehension of bias, given those exchanges were never put before the arbitrator; it was inappropriate to draw such an inference from material unknown to the tribunal. Overall, the decision serves as a timely prompt to practitioners...

In this issue: Trade marks Patents Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Trade marks Morley’s fries copycat franchise in trade mark proceedings (Morley’s v Nanthakumar) A thriving takeaway franchise facing imitators prevailed in a trade mark infringement claim. The primary defence hinged on a settlement agreement, yet that agreement a) offered no benefit to franchisees, and b) did not authorise the use at issue in any event. The matter provides practical insights for those involved in litigation. Arguably more noteworthy are the drafting takeaways arising from the settlement agreement tested in court. The court also concluded there was joint tortfeasorship on the part of an individual defendant. Authored by Giles Parsons, partner at Browne Jacobson, and Conor Moran, associate at Browne Jacobson...

The Burke Partnership v The Body Shop International Ltd [2023] EWHC 2897 (Ch) Franchise contracts are commonly set for the medium to long term, often include renewal provisions, and, at the outset of a new relationship, both sides frequently avoid hard bargaining over termination and exit mechanics. Yet a franchisor’s ability to disengage from a lengthy arrangement when a franchisee no longer aligns with its operating model warrants close consideration. The English High Court recently considered whether cosmetics retailer The Body Shop could, in the absence of express termination clauses, bring long-standing franchise agreements to an end on reasonable notice after roughly forty years. The judgment may make uncomfortable reading for franchisors, who could find their room for manoeuvre more limited than anticipated... The background and the dispute In 1980 and 1981, Body Shop International, acting as franchisor (Body Shop), and The Burke Partnership (the Franchisee) entered into two franchise agreements to run Body Shop retail outlets within two small territories in Norfolk and Cambridge (the Agreements)...

This table outlines every concluded probe by the Czech Republic’s competition watchdog, the Office for the Protection of Competition (OPC), into suspected cartels, anti-competitive agreements and abuses of dominance (Articles 101/102 TFEU and national analogues) since 2018. Note—only investigations disclosed publicly are listed. 2026 Investigations under Article 101 TFEU/Article 3 of the Act on the Protection of Competition Electronics – HP TRONIC Zlín, spol. s r.o.: Restrictive agreement—RPM. Infringement decision announced—07/05/2026; fines totalling CZK 38,971,000 imposed. Household appliances – Elberry s.r.o.: Restrictive agreement—RPM. Infringement decision issued—09/01/2026; fines totalling CZK 767,000 imposed. Investigations under Article 102 TFEU/Article 11 of the Act on the Protection of Competition Online text advertising for property listings on dedicated real-estate portals – Seznam.cz: Concern that Seznam.cz abused a dominant position by charging higher unit prices to small-volume advertisers than to larger ones and by varying prices by region and franchise status. Commitments accepted—05/03/2026. Article 19a of the Act on the Protection of...

Commercial contracts—Australia—Q&A guide This Practice Note offers a jurisdiction-specific Q&A on commercial contracts in Australia, featured in the Lexology Getting the Deal Through series by Law Business Research (published: October 2022). Authors: Baker McKenzie—Adrian J. Lawrence; Caitlin Whale 1. Is there an obligation to use good faith when negotiating a contract? Australian contract law does not recognise a universal duty to act in good faith during negotiations. Courts have nevertheless found that an express agreement to negotiate a particular issue in good faith can be enforceable, provided the clause is drafted with sufficient clarity so it can be given practical effect. In limited contexts, a statutory requirement to negotiate in good faith may arise. For example, the Franchising Code of Conduct obliges the parties to a franchise agreement to act in good faith towards each other, including when negotiating that agreement. While not a good faith duty, laws prohibiting misleading or deceptive conduct frequently affect bargaining conduct. The Australian Consumer Law prohibits a person in trade or...

This Practice Note reviews the key issues a franchise agreement ought to cover, notably clear definition of the franchisee’s rights and the applicable territory, whether the grant is on an exclusive basis, thorough attention to sales targets and development plans, and the licensing of intellectual property together with the availability of trade names and domain names. It also underlines the need for a carefully drafted manual and the principal topics that manual should address. While the structure and content resemble a distribution (reseller) agreement, a franchise agreement places much greater emphasis on day‑to‑day operation to secure uniformity and consistency. The principal matters include: Scope of rights and territory Exclusivity of the franchise Sales targets and development planning IP licensing, trade names and domain names Quality and content of the operational manual Grant of rights The agreement should set out the rights conferred on the franchisee with precision, so both parties are clear about their objectives. The extent...

[ insert name of Franchisor ] [ insert Franchisor’s address ] Dear [ insert Franchisor name ], Proposed franchise agreement to be entered into between [ insert name of franchisor ] and [ insert name of franchisee ] (the ‘Agreement’) The Franchisee acknowledges that despite clause [ Acknowledgement clause where Franchisor advises Franchisee to seek advice ] of...

[ On the official letterhead of the FRANCHISEE adviser ] [ Enter the franchisor adviser’s name ] [ Enter the franchisor adviser’s address ] Dear [ Enter the franchisor adviser’s name ] The contract proposed to be entered between [...

This DEED of agreement is entered into on [ insert date ] Parties [ insert name of party ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] whose registered office is at ] [ insert address ] (Franchisor); and [ insert name of party ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] whose registered office is at ] [ insert address ] (Developer). (Each of the Franchisor and the Developer is a party and, together, the Franchisor and the Developer are the parties.) Background: The Franchisor has created the Method and established the Business. The Franchisor [ has applied to register OR is the registered proprietor of OR owns OR has the right to sub‑licence ] the Trade Marks. Seeking to grow its franchise network, the Franchisor is willing to appoint the Developer...