A franchise agreement is a partnership document between two parties. The primary party is the Franchisor. This entity owns a master group of similar business selling/providing the same product or service. The Franchisor sells a ‘Right’ to his name and his conditions in exchange for a royalty fee. The second party is the Franchisee. This business entity desires to use the name and the conditions set by the Franchisor to gain access to or expand his business customer base. In exchange he is willing to pay a royalty fee to the Franchisor.
Every franchise agreement should discuss the issue of the source of customers. This is known as the geographical territory, protected territory or exclusive territory. Many agreements spell out the zone or area of your customer […]