Franchise agreement and manual
Through agreement with the franchisor, the franchisee gets access to take part in the concept.
There are currently no legal regulations governing the content of a franchise agreement. This does not mean that the agreement is written in a "vacuum", as there are a number of sources for what a franchise agreement should contain in order for it to be franchising at all (e.g. ICC Model International Franchising Contract and Principles of European Law on Commercial Agency, Franchise and Distribution Contracts).
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There are laws in some jurisdictions (eg Sweden) which regulates what the franchisor must disclose (so-called disclosure law), but there is no regulation of what a franchise agreement should contain.
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This means that virtually all rights and obligations between franchisor and franchisee in relation to each other must be regulated in the franchise agreement between them.
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The franchise agreement sets out the framework for the business and forms the basis for the franchise cooperation and places great demands on being clear and comprehensible.
A franchise agreement is a mixed agreement as it contains parts from a number of different types of agreement and from several different areas of law, including, for example;
· Trademark license
· Know-how and other intellectual property rights included in the concept
· Purchase or leasing agreement inventory or concept elements
· Reseller agreement regarding products or services
· Lease of premises
· Marketing of the concept
· Warranty obligations regarding the purchase of goods
· Confidentiality obligations
· Restrictions on competition
· Loyalty obligations regarding the purchase of goods and services
It is important to bear in mind that each business concept, franchise system and franchise partnership has its own distinctive characteristics and needs. It is therefore crucial for success that the final drafting of the franchise agreement is tailored to the individual franchise.
A common structure of a franchise agreement is that the contractual framework consists of two main parts;
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The general contract provisions
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Manual/handbook/concept handbook indicating the operational and commercial parts of the cooperation
What can Harpers do?
Since we can provide legal and operational advice in combination, we can help with both the general contract provisions and the franchise manual.
We help you with a franchise agreement that is adapted to the chain's operation and concept with a subsequent manual/concept manual embedded with the general provisions of the franchise agreement.
We offer a complete contract package and can facilitate digital distribution and cloud-based contract administration. Also, assist with an optimal distribution of relevant documents as well as any needed revision and updating of the current franchise agreement.