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A franchise agreement is a legally binding contract between a franchisor (the business owner) and a franchisee (the business operator), outlining the terms and conditions under which the franchisee can operate a business using the franchisor's brand, systems, and trademarks.

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4 easy steps to Franchise Agreement Registration.

Fill up the Form.
Submit the documents.
Pay only professional fee.
Get your Franchise Agreement Registration.

Process of Franchise Agreement

Discussion & Term Finalisation
- Both parties negotiate and agree on key terms such as:
  - Franchise fee and royalty
  - Duration of agreement
  - Territory rights
  - Branding, training, and support
- A Letter of Intent (LOI) or Memorandum of Understanding (MoU) may be signed initially
Drafting of Franchise Agreement
- Legal experts draft a detailed agreement that includes:
  - Scope of franchise rights
  - Use of trademarks and branding
  - SOP compliance
  - Confidentiality and non-compete clauses
  - Termination and dispute resolution provisions
Review and Negotiation
- Parties review the draft with legal/financial advisors
- Required changes are made before finalisation
- Parties agree on the final draft for execution
Payment of Stamp Duty
- Stamp duty is paid based on State Stamp Act (fixed or percentage-based)
- The agreement is printed on non-judicial stamp paper
Execution of Agreement
- Both parties sign the agreement along with two witnesses
- If necessary, sign in the presence of a Notary Public or at the Sub-Registrar Office (for formal registration)
Notarisation / Registration
- For legal enforceability, either:
  - Notarise the document (common for short-term agreements)
  - Register it at the Sub-Registrar Office (preferred for long-term, high-value deals)
Handover and Launch
- Franchisee receives:
  - Brand usage rights
  - Operational manuals & SOPs
  - Training and onboarding
- Business setup begins and franchise operations start

Content of Franchise Agreement

Title and Date

Title: “Franchise Agreement”
Date and place of execution

Details of the Parties

Name, address, business registration details of:
- Franchisor
- Franchisee

Grant of Franchise

Grant of license to use brand name, trademarks, trade dress
Defined territory or location (exclusive or non-exclusive rights)
Duration of the franchise term

Franchise Fee and Royalty

Initial franchise fee (one-time)
Ongoing royalty or percentage of monthly sales
Payment mode and due dates

Training and Support

Scope of training provided by franchisor
Initial and ongoing support (technical, marketing, staffing)

Operating Obligations of Franchisee

Adherence to franchisor’s standard operating procedures (SOPs)
Use of approved products, branding, and vendors
Maintenance of quality, hygiene, and service standards

Rights and Obligations of Franchisor

Monitoring and inspection rights
Brand development and marketing responsibilities
Product supply, R&D, and innovation

Use of Intellectual Property

Conditions for usage of logos, trademarks, and brand elements
No right to sub-license or assign without consent
Protection of IP by the franchisee

Advertising and Promotions

Local vs national advertising
Franchisee’s contribution to marketing fund (if any)
Approval requirements for local campaigns

Term and Renewal

Initial term (e.g., 3 years, 5 years)
Renewal conditions and process
Performance benchmarks for renewal

Termination Clause

Grounds for termination (breach, insolvency, failure to perform)
Notice period and cure period
Consequences of termination (return of assets, debranding)

Dispute Resolution

Process for resolving disputes (mediation/arbitration)
Jurisdiction and applicable law (typically Indian Contract Act & Arbitration Act)

Documents of Franchise Agreement

Business Identity Proofs

For Franchisor and Franchisee:

PAN Card (mandatory)
Aadhaar Card / Passport / Voter ID
GST Certificate (if applicable)
Company incorporation certificate (if entity)
Partnership Deed / LLP Agreement (if applicable)

Address Proofs of Business

Utility bill (electricity, water, or gas – not older than 2 months)
Rent Agreement / Ownership Proof of premises
No Objection Certificate (NOC) from landlord (if rented)

Brand-Related Documents (From Franchisor)

Trademark registration certificate (if registered)
Brand and logo usage guidelines
Product list or catalogue
Marketing & training material (optional but recommended)

Financial Documents

Franchisee’s bank statements or net worth certificate (for screening)
Financial projections (annexure to the agreement)
Past sales records or investment proposal (from franchisor)

Franchise Agreement Draft

Legally vetted agreement containing:
- Franchise scope, location, fees, term
- Intellectual property rights
- Obligations of both parties
- Dispute resolution clauses

Photographs and Authorisations

Passport-size photographs of authorized signatories
Board resolution / POA for authorized signatory (if company signs)
Identity proof and address of two witnesses who will sign the agreement

Registration of Franchise Agreement

Is Registration of Franchise Agreement Mandatory?

No, but it is strongly recommended for high-value or long-term contracts
Many franchisors prefer notarisation instead of registration for faster execution
Stamp duty must still be paid as per the respective State Stamp Act, even if not registered