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What to Negotiate in a Franchise Agreement

By FranchiseFeast Editorial

A printable checklist of the terms franchise attorneys most often describe as negotiable, and the ones they do not, framed as questions to raise with your own attorney.

Franchise agreements are written by the franchisor, but they are not always take-it-or-leave-it. Franchise attorneys generally report that fees and brand-fund formulas are rarely changed, to keep the system uniform, while territory, personal-guarantee scope, transfer, renewal, and cure terms are where there is more room to discuss. This checklist lists the terms to raise, framed as questions, not conclusions. It is educational, not legal advice: an experienced franchise attorney, ideally one who has worked with this specific brand, is the person to advise what is realistically negotiable for your situation and what risk you accept on anything that is not.

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What franchisors will and will not typically negotiate

Territory and protection

Personal-guarantee scope

Transfer and renewal terms

Marketing-fund caps and reporting

Cure periods and termination

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Before you sign anything

This resource is for general educational purposes only and is not legal, financial, or tax advice. Franchise laws, the FDD, and franchise agreements vary by state and by brand. Review the full FDD and franchise agreement with a franchise attorney licensed in your state and a qualified accountant before you sign anything or pay any money.

Sources

  1. The Internicola Law Firm, Are Franchise Agreements Negotiable (negotiable vs non-negotiable terms; smaller systems more flexible)
  2. The Internicola Law Firm, What Should You Negotiate in Your Franchise Agreement, Part 1 (territory and personal-guarantee examples)
  3. NASAA, Are You an Informed Investor? Franchises (renewal, future-royalty, arbitration, and system-change cautions)