The Franchise Agreement involves one tier of licensing, from the franchisor to the franchisee.

Usually, the franchisor or its solicitors will prepare the franchise agreement. However, as the agreement may be the same one that is used for all franchisees, there may be limited scope for the franchissee to negotiate for better terms. Much depends on the bargaining powers of the parties.

Generally, s franchisor should not generally vary the terms of its franchise agreements because this may cause strong feelings between franchisees if they discover that some have better terms than others

Nevertheless, where possible, potential franchisees may need to negotiate the terms to strike a balance between protecting the franchisor’s interests and being acceptable to potential franchisees.