Franchising is when the owner (franchisor) of a certain product, service, or business for that matter obtains distribution through affiliated dealers (franchisees). Popular franchises are all around us, with the likes of prominent fast-food chains such as McDonald’s, KFC, Pizza Hut, or Burger King and convenient stores such as 7-Eleven and even hotels like Mariott and the Hilton. For some, franchising most especially well-known brands and businesses can be a much better opportunity since people are familiar with this. At times familiarity in business gives you an edge, but of course, this all depends on how management runs their business. Now if you wish to engage in a restaurant franchise business, it is important to do your research first then after careful deliberation, make sure a restaurant franchise agreement is prepared to finalize the transaction. To learn more about this, let us discuss this further below. If you need to create a franchise agreement for your restaurant, then check out our free restaurant franchise agreement samples that are available for download on this page.
10+ Restaurant Franchise Agreement Samples
1. Restaurant Franchise Agreement Template
2. Restaurant Sub Franchise Agreement Template
3. Restaurant Marketing Franchise Agreement
4. Restaurant Joint Venture Franchise Agreement
5. Restaurant Franchise Agreement
6. Sample Restaurant Franchise Agreement
7. Standard Restaurant Franchise Agreement
8. Basic Restaurant Franchise Agreement
9. Restaurant Franchise License Agreement
10. Franchise Agreement for Restaurant
11. Restaurant Business Franchise Agreement
What Is a Restaurant Franchise Agreement?
Franchising a restaurant business has its advantages and its own risks. But if you think you can outweigh the risks, and have what it takes to run this kind of business then go for it. And for franchisors franchising restaurant concepts allows for fast growth. If you expand your brand through franchising, the investment in new outlets comes from franchisees. Basically, franchising gives you an opportunity to grow in multiple markets simultaneously.
The basic concept of restaurant franchising is that this allows a franchisee to be able to open a restaurant with an already existing business model, operating procedures, and support and management training, while the corporate proprietors succeed by instituting fees to license and expand the brand. It may seem like a challenge, but we have seen several successful restaurant franchises, in fact, restaurants have proven to be the most popular franchising business of all. So, once you have decided to push through with the franchise, the next step to the process is to finalize this with a restaurant franchise agreement. This is a legal document that binds the two parties which are the franchisor being the restaurant’s corporate owner and the franchisee who is the promising operator. Generally, the document explains in detail what the franchisor expects from you, as a franchisee, in the way you operate every facet of the business.
How To Create a Restaurant Franchise Agreement?
It is a must once a restaurant franchising deal is on the table, that both parties are asked to sign a restaurant franchise agreement since they both must agree to the terms and conditions set upon the contract. And should there be a breach, legal action can be imposed. Now, there is no standard form of franchise agreement because the terms, conditions, and methods of operations of various franchises may vary on what particular restaurant you wish to run. Every fast-food chain, fine-dining, cafes have their own unique policies, but of course, there are certain provisions that are generally found in this particular agreement. The following below should be able to help you create a restaurant franchise agreement.
I. Franchise Fees and Royalties
A certain amount of money must be paid by the franchisee to the franchisor. Those costs will be clearly outlined in the document. Most franchisors require franchisees to pay an ongoing royalty, usually a percentage of total sales, which is often paid on a monthly basis.
The agreement will designate a territory in which the franchisee could open up the restaurant business and outline any exclusivity rights you may have.
III. Trademark / Trade Name
Outline how a franchisee can use the franchisor’s trademark, patent, logo, and signage.
IV. Marketing System or a Method of Operations
The franchisee must provide how their marketing system works as well as the business operations which are details of how franchisees are expected to run their units.
V. Termination and Cancellation Policies
Like most agreements, a termination clause and cancellation policies must be included in the document so in the event should anything happens that will lead to such a scenario, both parties will know what to expect.
VI. Renewal and Exit
If the franchisee wishes to renew his or her contract, terms of such must be specified in the contract. And another important detail to include is that every franchise has its own resale policy. Some allow franchisees to sell their franchises at their discretion. Other agreements include buyback or right of first refusal clauses.
The document should include the length of the franchise agreement.
Do Franchise Owners Have Salaries?
In most cases, they do not have any salaries instead, both a franchise owner and a franchisor make money through the business’ success–which is the profit. A franchisor makes money from royalties and fees paid by the franchise owners.
What Is a Master Franchise?
A master franchise is one managed by a master franchisee, an investor who pays the franchisor a large initial fee to secure the rights to develop the business under the brand name in a specified region.
What are the Benefits of Franchising?
Aside from increasing brand awareness, franchising allows operators a chance to own, manage, and direct their own business without having to take all the associated risks.
Once you decide to franchise a restaurant, don’t forget to prepare a restaurant franchise agreement to seal the deal. To make it easier for you to prepare download our free samples now!
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