Simple Guide to Franchise Agreement UK

After thorough research and evaluating all the franchises UK, if you have finally decided the franchise that you want to invest in, then comes one of the most crucial parts of the entire process; the process of Formulating and Signing the Franchise Agreement.

Even if you and the franchisor have verbally agreed to all the terms and conditions, and have comprehensively discussed all the major and minor points that are going to be included in the Franchise Agreement. No verbal discussion matters if you have not done any paperwork.

It is your chance to state your requirements and get the legal agreement of the franchisor; you have to make sure that you make the most of this opportunity. This guide will help you learn about all the essential aspects of a Franchise Agreement and will assist you in formulating a concrete agreement.


Make It Comprehensive

You will most probably not get another chance to gain legal agreement on your demands from your franchisor. So, even if you are investing in world-famous coffee franchises, the best food franchises UK or low cost franchises – you have to ensure that you are adding every tiny little detail in the agreement. In the excitement of starting your new franchises UK, you might not want to spend too much time on formulating the Franchise Agreement. Don’t commit this mistake as it can put you in trouble in the long run and limit your legal rights.

A Franchise agreement must include the following:


•    Franchise Fees

How much franchise fees would be initially charged and would you be charged any on-going fee or not, and why? And what services will you receive against the fees?


•    Term

How long would the duration of the franchise agreement? How long would the probation period? How much would the agreement renewal cost? Would a nominal fee be charged or you would be charged a full franchising fee for renewal?


•    Territory

Is there any location requirements? Is there a specific property foot space requirement? Is the parking area necessary?


•    Products, Supplies, and Procurement

Are there any particular suppliers? Will you be purchasing the supplies on your own from the supplier of your choice? Or the supplies will be provided to you? Is there a specific number of products that should be ordered at a time? Can you make any changes to the product? Would the Franchisor decide the price?


•    Minimum Operation Hours

Discuss the minimum and the maximum number of operating hours. Is there a specific time of opening and closing the franchise daily? Would all the Franchises in the same region open and close at the same time?


•    Workers

What is the staffing policy of the franchise? Is there a specific hierarchy that has to be followed? Is there any particular skill, qualification or experience requirement?


•    Training and Support

Would the Franchisor offer full-term training and support? Would you be charged for it or it’ll be free? Would initial training cost be included in the Franchise Fee? How long would be the training? Where would it be conducted?


•    Trademarks

Would you be receiving the authority to use the trademarks? Are there any rules regarding trademarks? Would you have to pay any fee for trademark registration? Can you make changes to the trademarks, if needed?


•    Insurance

What insurance policies does the franchisor follow according to the business model? Are they essential for your franchise as well? Would you have to sign up for insurance policies yourself or the franchisor will get it?


•    Franchise Selling, Transfer or Expansion

What are the rules and regulations for selling or transferring the franchise UK to another franchisee? Would there be any charges or notice period? Having an exit plan is equally important as all of the other details. Also, discuss the prospects and rules regarding expansion.


•    Death or Termination of the Contract

Who will the in-charge be in case of death? What points will breach the contract and terminate it? Is it possible to terminate it before the due Contract period?


Formulate and Submit a Draft Copy before the Final Agreement

It is always a good idea to submit a draft to formulate a draft copy and send it to the franchisor beforehand to read before you make the Final Franchise Agreement. It will allow both the parties to discuss and understand each other’s terms and conditions before the final agreement is signed.

To find out more about franchising your business, visit the Quality Franchise Association website.