Franchise Agreements: Negotiation and Drafting Strategies

This CLE webinar will provide guidance to business counsel on how to negotiate and draft franchise agreements and ancillary documents. The discussion will include key issues for counsel to consider when advising clients concerning key provisions in the franchise agreement, related franchise documents, the disclosure and regulatory framework governing franchise relationships, negotiating strategies, dispute resolution, and other risk management strategies.

Franchise agreements are highly regulated contracts that require careful drafting. The heart of every franchise contract is a trademark license, although not every trademark license is a franchise. Unlike other consensual business arrangements, a franchisor must comply with a comprehensive pre-sale disclosure process to lawfully form a franchise. Additionally, compared to other business arrangements, franchises tend to be long-term contracts lasting 20 years or longer, subject to renewal terms, which makes it imperative that franchise agreements give the franchisor authority to require franchisees to modify their operations so that the franchisor can keep the brand competitive and relevant to consumers. Practitioners must understand the complex regulatory landscape and wide array of legal issues in representing franchise parties in the negotiation and enforcement of franchise agreements.

Most franchisors will entertain at least some negotiation of franchise contract terms. This program highlights the key provisions in franchise agreements and the terms most commonly negotiated by franchise parties in forming their relationship from the point of view of the franchisor and franchisee.

Our panel will provide guidance to business counsel to identify factors influencing a franchisor's willingness to negotiate and a franchisee's relative negotiating strength, and will then discuss typical negotiating strategies for key contract provisions, including term length and renewal rights; fees payable to the franchisor; territorial rights and exclusivity; time frame for development; covenants not to compete and other post-term restrictions; personal guarantees by franchise owners and indemnity obligations; transfer restrictions; the franchisor's right to make future changes to the franchise program; termination; and dispute resolution.

Listen as our expert panel navigates the complexities of drafting and negotiating franchise agreements.