What is a Franchise Agreement Checklist?

A franchise agreement checklist is a list of things that you need when you are having a franchise contract agreement. These are the important things that you have to settle before you can have your franchise business. Anyway, what is a franchise agreement? A franchise agreement is a document that gives consent to use the enterprise name by an individual. It means that if you have a brand identity, someone can have a franchise or buy a branch of your business and use your enterprise name. Through franchise, your company system can also be used. A franchise agreement is common in food stalls, fast-food chains, and restaurants. There can be also a hotel franchise. Whether you will have a sub-franchise or you will be a master franchisee, you need to enter into a franchise agreement for you to have the franchise of the business. There can be also a checklist that you need to follow to be sure that you can meet the requirements for franchising. The franchisor needs to ensure that you will be qualified to have a franchise of his or her business. With the checklist, you should also know what you should do to start the franchise. It consists of necessary steps that you need to accomplish or go over first before signing a franchise agreement.

Things in the Franchise Agreement Checklist

If you have seen a sample of franchise agreement or a sample of a franchise contract, maybe you have an idea of what a checklist of a franchise agreement is all about. But in case you do not have an idea at all, here are the things that you should put in a franchise agreement checklist:

Franchise Fee

You must not forget the fees that you are going to pay in your franchise. It may include the franchise fee, the royalty fee, and other costs that you have to pay. You need to prepare money for these fees for you to be able to make a franchise. It is one of the first things that you have to give importance to make a franchise. Before considering any franchise business, you need to prepare your money so that afterward you can choose the franchise business that you like. This will be your capital in starting your business. Small franchises like food stalls may need a small amount of capital, but bigger franchises like fast food-chains require a considerably large sum of money. In choosing a franchise business, you must consider the brand identity and you can tell whether the franchise price is high or reasonable. Franchise a business that you know you can get profit. With this, you may consider making a franchise with a business that has a popular name only.

Intellectual Property

The things about intellectual property must be clear. You must know if that through your franchise, you will have a right for it or not. You can research how you can settle things about intellectual property. You need this thing before you can make a franchise agreement contract with the franchisor. Things about intellectual property are having a license with logos, trademarks, and using business systems.


You must know how you can conduct training for your employees. Your franchise business should have uniformity with the business of the franchisor so you have to make sure that you will not go far from it. You need specific instructions on how you can do this thing. You must discuss this with the franchisor and should learn the strategies on how you can train your employees.

Operation System

Hand in hand with training, you must know how you can do operations for your franchise business. It must not go far from the system of the original business. You have to conduct all your business operations according to the system of the franchisor. From management to staff, you need to know how you can do things.

Length of Franchise

You need to discuss the length of your franchise. If you can have it in a considerable short time, you may want to ask how you can do renewal of terms. The length of the franchise may be according to the franchise money that you can give. If you are not sure about the business, you can start with a short matter of time to agree with. But if you know that the brand is a good one, you can set a length of the franchise that will last for many years.


You must also settle terms about termination. If you can see that you are not going anywhere with the franchise and you want to stop the business, you may want to put a clause about termination. This clause should be something that both parties will agree upon. You must set clear boundaries on how you will end the agreement.

Non-Compete Period

Franchisors may have some rules in franchising. They may not want you to work in other companies that can give competition to their business at the time that you are having a franchise with them. They can make a non-compete agreement that they will make you sign to ensure that you are going to follow their rules.

Post-Term Condition

There can be requirements that you have to adhere to after the term of your franchise. You may need to return confidential things or some intellectual property materials. Sometimes, you may need to pay some fees. You need to be clear about post-term conditions so that there will be a good closing with your relationship with the franchisor.


As you are having a branch of the business of the franchisor, the next question can be ‘Where will your franchise be located?’. You must discuss with the franchisor your territory. Will the franchisor put another branch near your location or you will have the territory in that place? You need to discuss this because it can affect your target market. You can have a better market plan if you can own a territory. So, it is up to you to negotiate about this thing.


Your franchise should be a complete replica of the business of the franchisor. You have to discuss how it can be possible. Ask for all the suppliers that can do the construction of your business. The franchisor may even make the process easier for you by providing all you need.


You are going to manage your own business but even things about advertising must be uniform with the business you have franchised. You have to get the style on how your business can be advertised. But in regards to the marketing strategy, you can make some changes. Though you still need to copy some strategies from the franchisor. Tackle things about the marketing plan and sales plan.


Even it is a franchise, you need your business to be insured. Discuss things about insurance because insurance can guarantee the safety of any business. Ask how the franchisor is having insurance for his or her business and you may want to have the same insurance for your franchise.


The franchisee must pay the franchisor if ever he or she has done something that can ruin the reputation of the business. You must talk about the indemnification clause so if ever damage to the business will happen, both of you will know what to do. You can settle the matter quickly through the indemnification clause.


Things happen. The franchisor should know what to do if ever you will die or become incapacitated. Who will handle the business? Will you hand it over to your family? There should be a complete discussion about this so that the franchisor will not be left clueless if ever unexpected things happen.

Tips on Franchise Business

Aside from reviewing any franchise agreement example or franchise contract sample to make your agreement, you may want to have some tips that you can use in making a franchise business. Read the following and consider the tips that you can use as you make a franchise:

Know Your Business Skills: When you are going to make a business, know that you are the one who will be going to make it run. You must ensure that you have enough skills to run a business. If you are not equipped with this talent, you may attend some seminars or workshops in entrepreneurship that can enhance your business skills. A franchise may be a big responsibility. You have to keep up with the same success that your franchisor has with his or her business. You need to keep up with the quality of the franchise you are having. For this reason, you need to hone your skills in business. You owe it to the franchisor to keep the quality that can be given in running the franchise of the business. If you can assess that your business skills are right for the franchise, you know that you can start the business without having any fear that it will fail.A Comfortable System For You: When choosing a franchise business, you must first know if you can be comfortable with the business system of the franchisor. If you can find a franchise business that you think management will be easy, then you can opt to pick that franchise because you know that you can perform well in handling the business. It does not matter if you will pick a restaurant franchise or any basic franchise. You must ensure that you can keep up with the business system with ease. Do not choose a system that seems complicated for you. You will just have some stress in handling the business. If you will be comfortable in a business system, you will be more likely to excel in the business.Support From Your Family: Having a franchise business may be time-consuming. You may need the support of your family in handling the business. They can help you in any way that they can. It can give a lot of joy to you if you will involve your family in the business. You can work together as a family and it can be fun doing that. You will not be alone in running your business. From the start, they can advise you whether the franchise business agreement will be good for you. They can guide you on what business to take. It is always good to ask opinions from other people. You can expect a better outcome if you will do it.Ask a Lot of Questions to the Franchisor: In your franchise agreement checklist, you can find the necessary things that you need to discuss with the franchisor. Be sure to ask a lot of questions so that everything that you would like to know will be answered. Running a business is not simple. Even more so, running a franchise may require you to do a lot of things. To be sure that you will not have problems with anything, be sure that you will know everything about the franchise business.

How to Begin a Franchise Business

After you are through with the franchise agreement terms checklist, you may want to know how you can start your franchise business. You may consider the following steps in starting a franchise:

Step 1: Select a Franchise According to Your Goals

To get the best franchise business, you must research the market about which franchise can work best for you. If you want a food business, you may consider having a franchise business of a restaurant. Your selection must depend according to the goals that you have. If you want to earn the biggest profit, then you can choose to have a franchise of a business that has a popular brand identity.

Step 2: Make a Market Research

You should know what works and what does not work. Research the market so that you will know what franchise business can truly give you a profit. With market research, find the franchise opportunity that will be best for you.

Step 3: Make a Business Plan

When you have already selected the franchise business that you want, you must make a business plan. Through it, you can have a roadmap that you can follow as you will run the business. Research document templates about business plans and you can start making the business plan that can guide you.

Step 4: Sign a Franchise Agreement

After you have obtained your capital and after making a financial plan or financial strategy, you can now sign a franchise agreement. You may want to know why a franchise agreement is important. It is essential because you are borrowing an enterprise name. A contract is vital because everything must be settled in documents.

Step 5: Open Your Franchise

The next thing that you have to do after signing the agreement is to start running the business. Hire employees and get them trained. Start the operation having the hope that you can keep up with the expectation of the business of the franchisor. When everything is done, you can start to publicly open your franchise.


How Much Does a Franchise Cost?

The cost of a franchise depends on the business that you are going to have. On average, it may cost $35,000. But some franchises cost over $100,000. Just look if the business will be reasonable for the price quote so that you can be sure of profits.

What is Included in Franchise Agreement?

Certain things are included in a franchise agreement. It includes the franchise price, the length of the franchise, the territory, termination clause, indemnification clause, and post-term requirements. Sometimes, you can find what you should include in a franchise agreement checklist.

If you are a new entrepreneur, you may consider having a franchise as your business. You can ride on the popularity of the franchise business. You can be sure of customers because the business has already been there. Do you need a template of franchise agreement checklist? This post can provide that. It has 3+ SAMPLE Franchise Agreement Checklist in PDF. Download now!