The franchise agreement explained
The agreement is the contract you live with for years. Here is what is in it, which clauses matter most, and how the law protects you around it.
What is a franchise agreement?
The Code gives you baseline rights the agreement cannot remove; the agreement fills in the commercial detail. Read both together.
The clauses that matter most
- Term and renewal, how long the agreement runs and on what terms you can continue.
- Territory, whether it is exclusive, and what the franchisor can and cannot do inside it.
- Fees, the full schedule: royalty, marketing levy, and any renewal, transfer or training fees.
- Restraint of trade, what you can and cannot do during and after the agreement.
- Termination, the grounds on which either side can end it, and what happens to the business if they do.
How the Franchising Code protects you
The Code is mandatory and enforced by the ACCC. It requires a 14-day disclosure period before signing, a 14-day cooling-off period after signing (during which the franchisor must refund what you paid, less reasonable expenses), and imposes a duty of good faith on both parties. These rights exist regardless of what the agreement says.
Before you sign
- Read the agreement alongside the disclosure document, not in isolation.
- Have a franchise lawyer review both and explain the exit and renewal terms.
- Confirm the fee schedule matches what you were quoted verbally.
- Remember the 14-day cooling-off period, exiting within it is your statutory right.
- Can a franchisor change the franchise agreement? What it can change and what it must disclose8 min
- Unfair contract terms in franchise agreements: the clauses the ACCC keeps flagging9 min
- What's negotiable in a franchise agreement (and what usually isn't)9 min
- How to exit a franchise: selling, transfer and non-renewal9 min
- Do you need a franchise lawyer?6 min
- Franchise agreement renewal: what to expect7 min
- Your obligations as a franchisee7 min
- Buying a franchise with a business partner7 min
- How long does a franchise agreement last?6 min
- Restraint of trade in franchise agreements7 min
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Frequently asked questions
Can you negotiate a franchise agreement?
Franchisors keep agreements largely standard to treat the network consistently, so major terms are rarely negotiable, but it is always worth asking, and always worth having a franchise lawyer review the document. Some commercial details can be clarified even where the core terms are fixed.
What happens when a franchise agreement ends?
It depends on the renewal terms in the agreement. Some allow renewal on notice, others end and require a fresh agreement, and some impose restraint-of-trade clauses on what you can do afterwards. Check the term, renewal and restraint clauses before you sign, not at the end.
Do I get time to review a franchise agreement before signing?
Yes. The Franchising Code 2025 requires the franchisor to give you the agreement, disclosure document and information statement at least 14 days before you sign, and a 14-day cooling-off period after. Use both.
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