Published on : 08 July 20212 min reading time
More and more people are attracted to the franchise in the UK because of its many benefits. But before embarking on the adventure “franchise”, it is important to know the ins and outs.
The franchise agreement
The franchise contract has no international definition. However, it can be defined as the contract by which the franchisee offers goods and / or services to customers under the franchisor’s brand.
The franchisor controls the franchisee and provides technical assistance. In return for this assistance, the franchisee makes regular payments to the franchisor.
Before concluding the franchise agreement, there may be pre-contracts such as, for example, a confidentiality agreement.
The franchise agreement subject to English law is, in general, very long as it must cover all the legal aspects of the execution, transfer and termination of the contract.
The franchise agreement is considered to have three parts:
- the franchisor
- the franchisee
- the individual representing society
Execution of the franchise agreement
There is no standard duration of the franchise agreement in English law. Most franchise agreements have an initial term followed by a renewal option allowing the franchisee to continue the franchise or not. Renewal is never automatic.
English law has a particular terminology in terms of franchise contract:
- “Exclusive”: in this case, the franchisee will be protected against the franchisor and against other franchisees of the franchisor;
- “Sole”: the franchisor will not be able to open a new franchise in the franchisee’s area of activity, but he may open sales outlets that he will own in this business area.
Common law of contracts applies to the termination of the franchise agreement.