Setting up a franchise agreement can be a complex process, but it’s essential if you want to establish a successful franchise business. A franchise agreement is a legal document that outlines the rights and responsibilities of the franchisor and franchisee. It is a crucial element that ensures that both parties understand the terms of the agreement and the expectations.

If you are planning to set up a franchise agreement, here are some essential steps to follow:

1. Define Franchise Terms

Before you set up a franchise agreement, you need to define the terms of the franchise. This includes the franchise fee, royalty fee, and other costs associated with the franchise operation. This will help you to establish the financial requirements of the franchise, and it will also guide you in setting the terms of the agreement.

2. Choose an Attorney

The franchise agreement is a legal document, and you need an attorney experienced in franchise law to help you draft the agreement. A franchise attorney can also help you navigate the legal requirements of setting up a franchise, including state and federal regulations, and help you avoid legal pitfalls that could harm your business in the future.

3. Develop the Franchise Agreement

After selecting an attorney, it’s time to develop the franchise agreement. The agreement should be written in clear, concise language and should include all necessary terms and conditions of the franchise. It should also include information about marketing and advertising requirements, training and support, and operational guidelines. This is a critical part of the process, and it’s essential to ensure that all critical aspects of the franchise are covered.

4. Present the Agreement to the Franchisee

Once the agreement has been drafted, it’s time to present it to the franchisee. It is crucial to go through the agreement with the franchisee carefully and explain all the terms and conditions to ensure both parties understand the expectations.

5. Sign the Agreement

Once the franchisee has reviewed and agreed to all terms and conditions of the franchise agreement, it’s time to sign the agreement. This is the final step in the process, and both parties should sign the agreement in the presence of a notary. It is also essential to keep a copy of the agreement for future reference.


In conclusion, setting up a franchise agreement is an essential aspect of establishing a successful franchise business. Follow these steps to ensure that you have a clear, concise, and legally binding agreement that outlines the rights and responsibilities of both parties. Remember, it is advisable to have an experienced franchise attorney help you draft and review the agreement to avoid future legal issues.