Franchise Agreement

You buy a cup of chai at an outlet carrying a famous brand, and the owner of that outlet is not the company at all. He has paid for the right to use the name, the recipe and the shop design. The brand owner trusts him with its goodwill. If the relationship goes wrong, who can shut the shop, who keeps the customers, and can the owner open a rival stall next door? A franchise agreement has to answer all of that in advance.

In two minutes

A franchise agreement is a contract in which the franchisor allows the franchisee to run a business under the franchisor's trade mark and system, for fees and on controls; India has no single franchise statute, so the document rests on the Contract Act, the Trade Marks Act, 1999 and the parties' own clauses.

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