Home · Encyclopedia · Franchise agreement
Documents & legalFranchise agreement
The binding contract between the parties, setting out territory, term, fees, operating standards, renewal rights and termination conditions.
Where this sits
The document set is where every promise becomes binding. Reading it carefully before signing is an investor's single most important protection.
In practice
This section summarises United States federal regulation (16 CFR Part 436) as published by the Federal Trade Commission. Rules change and differ by country — check the source before acting. For reference only; not legal advice.
The agreement is where the relationship stops being a conversation. In a US disclosure document its most consequential terms are summarised in Item 17 — renewal, termination, transfer and dispute resolution — and the contract itself must be attached in full under Item 22.
Item 17 is the section to read twice. Renewal is rarely automatic, transfer usually needs consent, and dispute-resolution clauses often fix the forum and governing law far from where you will operate. Those four subjects decide what your investment is worth on the day you want to leave it.
Source: 16 CFR § 436.5(q) — Item 17 · § 436.5(v) — Item 22: Contracts · Reviewed: 2026-09-02