, LexisNexis(R) Forms FORM 240-3A.42
Summary
This document is intended to serve as a check list to be used in connection with structuring and drafting a form of franchise agreement. It is not intended for use as a legal document and is insufficient for that purpose.
1. Name of Company:
2. Trade name of Company, if different than legal name:
3. Principal business address:
4. Telephone number:
5. Business form of Company (e.g., corporation, general or limited partnership, LLC):
6. State of organization:
7. Description of business to be franchised:
8. Trademarks or service marks to be licensed to franchisees:
9. Name and contact information for manager that will interface with counsel in reviewing franchise documents:
10. Name and contact information for Company’s accountant:
1. What is the initial term of the agreement?
2. When does the term commence (e.g., on signing the franchise agreement, selection of the franchise site, or commencement of business)?
3. How, if at all, will term be affected by circumstances other than default (e.g., early lease termination):
4. Describe renewal rights, including duration of each renewal term:
1. Will franchisee be granted an exclusive territory?
2. If answer to question 1 is yes, will the territory be established before a franchise agreement is signed? If not, how will the territory be determined?
3. If franchisee is granted an exclusive territory, will it be a radius around the franchise business location or delineated by a map to be attached to the agreement?
4. If the franchisee’s exclusive territory is a radius, what will it be? If the radius is not uniform for all franchisees, indicate how the radius will be determined:
5. If the franchisee’s exclusive territory is delineated by a map, how will the territory be determined?
6. If the site for the franchise business will not be selected prior to the execution of the agreement, how will it be selected:
7. Under what circumstances may franchisee move location:
1. Describe the initial franchise fee and whether it is payable in full on signing the agreement or in installments (and if so, what are the installments):
2. Describe the recurring fees the franchisee will be required to pay:
1. Summarize the initial training given to franchisees:
2. Summarize any additional training after opening the franchise business. Note whether additional training is optional and additional fees are payable by the franchisee:
3. Describe training charges (include retraining managers or new franchisees upon transfer of the franchise):
4. Describe any requirement to participate in franchise conventions:
1. Is the franchisee-owner obligated to work full time in the franchise business? If not, who will manage it:
2. Describe any mandatory purchase requirements:
3. Describe the goods or services that may be offered by the franchisee:
4. Describe any mandatory computer software or hardware requirements:
5. Attach any procedures, operations and training manuals that have been developed for franchisees.
1. Describe mandatory contributions to advertising programs administered by the Company:
2. Must Company physically segregate funds received or just make a book entry:
3. Describe any fees or costs will Company take from the fund:
4. Describe any mandatory advertising or promotion that must be conducted by the franchisee in addition to contribution to the fund described in paragraph 1:
5. Describe any arrangement requiring franchisees to contribute to a franchisee advertising co-op. Include whether Company will contribute if there are any Company-owned outlets:
H. Repurchase Rights:
1. Describe any right reserved to Company to purchase the franchise:
2. Summarize any right of first refusal on proposed sale of franchise:
I. Dispute Resolution:
1. Will there be binding arbitration or court litigation:
2. What state’s law applies in disputes:
3. Where will arbitration or litigation occur:
4. Will either side bear its own legal fees, or does winner recover legal fees: