Restaurant Franchise Contract Sample
A restaurant franchise contract is a legally binding agreement between a franchisor and a franchisee that outlines the terms and conditions of the franchise relationship. The contract should be carefully reviewed by both parties before it is signed, as it will govern the relationship between the franchisor and the franchisee for the duration of the franchise term.
The following is a sample restaurant franchise contract that can be used as a starting point for negotiations between a franchisor and a franchisee.
Franchise Agreement
This Franchise Agreement (the "Agreement") is made and entered into this [date] by and between [franchisor name] ("Franchisor") and [franchisee name] ("Franchisee").
1. Grant of Franchise
1.1 Franchisor hereby grants to Franchisee a non-exclusive, non-transferable franchise to operate a restaurant under the Franchisor’s trade name, trademarks, service marks, and trade dress (the "Franchise System").
1.2 The Franchisee shall have the right to use the Franchise System at the following location (the "Franchise Premises"):
[Address of Franchise Premises]
1.3 The Franchisee shall have the right to use the Franchise System for the following term (the "Franchise Term"):
[Start date] to [end date]
2. Franchise Fee
2.1 Franchisee shall pay to Franchisor a franchise fee in the amount of [amount] (the "Franchise Fee"). The Franchise Fee shall be paid in [number] installments, as follows:
[Payment schedule]
3. Royalties
3.1 Franchisee shall pay to Franchisor a royalty equal to [percentage]% of Franchisee’s gross sales. The royalty shall be paid monthly, on or before the [date] of each month.
4. Advertising Fund
4.1 Franchisee shall contribute to Franchisor’s advertising fund in the amount of [amount] per month. The advertising fund shall be used to promote the Franchise System and increase sales.
5. Training
5.1 Franchisor shall provide Franchisee with initial training in the operation of the Franchise System. The training shall be conducted at Franchisor’s headquarters or at another location designated by Franchisor.
5.2 Franchisee shall also be required to attend ongoing training programs as required by Franchisor.
6. Operations Manual
6.1 Franchisor shall provide Franchisee with an operations manual that contains detailed instructions on how to operate the Franchise System. The operations manual shall be updated by Franchisor from time to time.
7. Quality Control
7.1 Franchisee shall maintain the quality of the products and services offered under the Franchise System in accordance with Franchisor’s standards. Franchisor shall have the right to inspect Franchisee’s premises and operations at any time to ensure compliance with these standards.
8. Confidentiality
8.1 Franchisee shall keep confidential all confidential information of Franchisor, including but not limited to the Franchise System, the operations manual, and the marketing plans. Franchisee shall not disclose any confidential information to any third party without the prior written consent of Franchisor.
9. Term and Termination
9.1 The Franchise Term shall commence on the date of this Agreement and shall continue for the period specified in Section 1.3.
9.2 Franchisor may terminate this Agreement for cause, including but not limited to the following:
- Franchisee’s failure to pay the Franchise Fee or royalties
- Franchisee’s breach of any other provision of this Agreement
- Franchisee’s conviction of a felony
- Franchisee’s bankruptcy
9.3 Franchisee may terminate this Agreement without cause by giving Franchisor [number] days’ written notice.
10. Governing Law
10.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [state].
11. Entire Agreement
11.1 This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral.
In Witness Whereof, the parties have executed this Agreement as of the date first written above.
Franchisor:
[Franchisor’s signature]
[Franchisor’s printed name]
Franchisee:
[Franchisee’s signature]
[Franchisee’s printed name]
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