THE FRANCHISE AGREEMENT

Franchise agreements are the key element of the relationship between a franchisor and franchisee. The development and ongoing management of a franchise agreement requires an understanding of key areas such as corporate structure, termination and default, supply terms, financial payments, disclosure requirements, marketing, rebates, intellectual property, pricing, and dispute resolution procedures. The form of the franchise agreement must reflect the commercial intent and means of business rather than be structured purely on legal considerations. A franchise agreement by its nature has enormous variety from one to the next and there are different structures such as master franchise agreements, multi-unit franchise agreements, area development franchise agreements and joint venture agreements. The distinction between a franchise agreement and pure license, agency or supplier agreement is often grey and it is important to identify the impact of the wrong classification.

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