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What is the Franchise Agreement?

Explore our glossary of useful terms for more franchise information. Below is an explanation of the franchise agreement. The franchise agreement is the contarctual document that determines the relationship, rules, regulations between a franchisor and a franchisee. It is an important legal document.

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The franchise agreement is the legal, written document that governs the relationship between the franchisor and franchisee. It specifies the terms of the franchise contract such as rights and responsibilities of the parties, fees and payments, territory and duration of agreement. In the case of a dispute, a judge will use the franchise agreement as proof of the terms and conditions of the contract. The franchise agreement must be disclosed at least 5 days prior to signing any contract with the franchisor. This period is intended to prevent the prospective franchisee jumping in and signing the contract, before reviewing and considering the terms of the agreement.

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