Franchise Agreement Solicitors
Franchise agreement solicitors draft and review the contract under which a franchisor licenses its brand, business system and know-how to a franchisee in return for fees, setting out territory, standards, support, restrictions and exit terms.
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Adam Bernard Solicitors acts for franchisors building a network and for franchisees reviewing an agreement before they invest.
There is no franchise-specific statute in England and Wales, which means the franchise agreement itself does almost all of the work. Franchise agreements are usually long, detailed and heavily weighted in favour of the franchisor, so independent advice is essential.
Call 0207 100 2525 or book a free consultation — via Zoom, Teams, WhatsApp or Skype
For Franchisors: Building a Scalable Agreement
A franchisor needs a franchise agreement that protects the brand, ensures consistent standards across the network and gives clear rights to intervene or terminate. Key elements include:
Grant of rights – licence of trade marks, business system and know-how.
Territory – exclusive or non-exclusive, and any performance conditions.
Fees – initial fee, ongoing management service fees and marketing fund contributions.
Operations manual – standards incorporated by reference and updated over time.
Training and support obligations.
Supply arrangements – approved or nominated suppliers.
Reporting and audit rights.
Restrictive covenants – during and after the term.
Termination, step-in rights and post-termination obligations.
For Franchisees: What to Check Before You Sign
Franchisees should check the fees, the territory, the term and renewal rights, the termination triggers, the restrictive covenants and what happens on sale or exit. In particular:
Whether the territory is genuinely exclusive.
The total cost, including management fees, marketing contributions and required fit-out.
Minimum performance targets.
Whether you can sell the franchise and on what conditions.
Personal guarantees from you as an individual.
The length and scope of post-termination non-competes. See our non-compete clause page.
Use our contract review service before committing.
Competition Law and Franchising
Franchise agreements are vertical agreements, so restrictions on pricing and sales territories must comply with UK competition law. Under the Competition Act 1998 and the Vertical Agreements Block Exemption Order 2022, franchisors generally cannot fix franchisees’ resale prices, although recommended and maximum prices are allowed. Non-compete obligations necessary to protect the franchisor’s know-how and network identity are treated more favourably. The CMA’s VABEO guidance addresses franchising.
Intellectual Property in Franchising
The franchisor’s trade marks and know-how are the core assets of a franchise, so they should be registered and protected before the network expands. Registering trade marks with the Intellectual Property Office strengthens enforcement. GOV.UK explains how to register a trade mark. Know-how should be protected with confidentiality obligations and, where needed, non-disclosure agreements during recruitment.
Consumer Law and Data in a Franchise Network
Franchisees selling to consumers must comply with consumer protection law, and data sharing across the network needs a clear legal basis. Consumer rights are governed by the Consumer Rights Act 2015. Where franchisor and franchisees share customer data, a data sharing agreement clarifies each party’s responsibilities.
Franchise vs Distribution vs Licence
A franchise involves a complete business system and ongoing control. If you simply want a business to resell your products, a distribution agreement may be more appropriate. If you are licensing an app or platform under another brand, see white label app agreements.
The Franchise Agreement Process
A typical franchise transaction involves five stages, and legal advice is valuable at each one.
Initial enquiry – the franchisor provides information and the parties sign a non-disclosure agreement.
Due diligence – the franchisee reviews the franchisor’s track record, financial information and existing franchisees’ experience. Company information is available through the Companies House service.
Deposit agreement – the franchisee pays a deposit to reserve a territory, and the terms on which it is refundable should be clear.
Franchise agreement – the main contract is negotiated and signed.
Launch – training, site set-up and opening.
Franchise Fees: What to Expect
Franchise fees usually include an initial fee, an ongoing management service fee and a marketing contribution. Ongoing fees are commonly a percentage of turnover. The franchise agreement should state exactly how each fee is calculated and what services the franchisee receives in return, including how the marketing fund is spent and reported.
How Adam Bernard Solicitors Can Help
We draft franchise agreements, operations manual legal sections and disclosure documents for franchisors, and review agreements for franchisees. See all our commercial contract services.
Call 0207 100 2525 (24/7) or book a free consultation to discuss your contract.
This page is for information only and does not constitute legal advice.
Frequently Asked Questions
Is franchising regulated by law in the UK?
How long does a franchise agreement usually last?
Can a franchisor set the prices a franchisee charges?
Can I sell my franchise?
Should a franchisee get legal advice before signing?
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