Franchise Agreement Drafting
Franchise agreements that protect your brand and spell out territory, fees, standards and termination clearly.
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A Franchise Agreement is the contract under which a brand owner, the franchisor, allows another business, the franchisee, to operate under its name and system in return for fees or royalties. It is needed by brand owners expanding through franchising and by entrepreneurs about to buy into an existing brand. India has no single franchise statute, so the contract carries most of the weight, alongside general contract, trademark, competition and consumer law. Our team drafts balanced agreements covering territory, fees, standards, training, term, renewal and termination.
Who provides this service: our legal documentation team, with anything that requires an advocate handled through a practising advocate.
Who Needs Franchise Agreement?
- Brand owners planning to expand through franchised outlets
- Entrepreneurs about to buy a franchise who want the contract reviewed first
- Restaurants, retail, education and service brands with a repeatable operating model
- Master franchisees who plan to appoint sub-franchisees in a region
- Foreign brands entering India through a franchise route
Key Benefits
- Territory, exclusivity and customer-access terms written precisely so franchisees and franchisors know their boundaries
- Fee and royalty structure recorded clearly, including how payments are calculated, reported and audited
- Brand, quality and operating standards set out with trademark licence terms that protect the franchisor’s marks
- Training, support and supply obligations defined for both sides to reduce friction during operations
- Term, renewal, transfer and termination rules drafted to avoid sudden exits and disputes over assets
- Drafting aware of competition, consumer and trademark law, since no dedicated franchise statute exists
How It Works
Review the franchise model
We study the brand, operating manual, unit economics and intended rollout, and confirm whether you act as franchisor or franchisee, so the agreement fits the actual model.
Check brand protection
We look at the status of the trademarks and other intellectual property being licensed and advise on any registration or assignment gaps that should be closed first.
Draft or review the terms
Our team prepares the agreement covering grant, territory, fees, standards, training, term, renewal, transfer and termination, or reviews one you have received and flags risks.
Negotiate and finalise
We help you work through comments from the other party, balancing commercial needs with legal protection until both sides are comfortable with the final wording.
Stamp and sign
We advise on stamp duty under the applicable state law, arrange stamping and signing by authorised persons, and keep an execution copy ready for your records.
Documents Required
- Identity, address proof and PAN of the franchisee and franchisor signatories
- Incorporation or registration certificates of both entities
- Trademark registration or application details for the licensed brand
- Franchise operating manual, brand guidelines and quality standards
- Proposed territory description and outlet or premises details
- Fee, royalty and payment structure proposed by the franchisor
- Board resolution or authority letter for company signatories
- GST registration details of both parties, where applicable
Timeline and Fees
Indicative timeline: A draft is typically prepared within one to two weeks of receiving the franchise model details. Final execution depends on negotiation with the other party and on state stamping procedures.
Professional fee: The fee depends on whether we draft a new agreement or review an existing one, the size of the franchise network, the complexity of fees and territory terms and whether intellectual property work is also needed. Contact us for a quote.
What Can Go Wrong if This Is Missed or Done Incorrectly
- Weak trademark and brand-use terms can allow misuse of the franchisor’s name and dilute the brand
- Unclear territory or exclusivity wording often leads to disputes over overlapping outlets
- Vague fee, reporting and audit clauses can cause disagreement over royalties and unpaid amounts
- One-sided or ambiguous termination terms can leave a franchisee stranded with stock, premises and signage
Frequently Asked Questions
Is there a specific franchise law in India?
No dedicated franchise statute currently governs the relationship. Franchise agreements are interpreted under the Indian Contract Act, 1872, along with trademark law, competition law, consumer protection law and tax rules. That makes the written agreement especially important, because rights and remedies are mostly those the parties have recorded in the contract.
What should a franchise agreement include?
At a minimum it should cover the grant of rights, territory, fees and royalties, brand and quality standards, training and support, trademark licence, confidentiality, term and renewal, transfer rights, termination and consequences, and governing law with dispute resolution. A franchisee should also look closely at what the franchisor must disclose.
Who owns the trademark in a franchise arrangement?
The franchisor keeps ownership of its trademarks and licenses their use to the franchisee under defined conditions. The agreement should limit use to approved outlets and materials, require quality control and say what happens to signage and goodwill when the arrangement ends. Registered marks give the franchisor stronger enforcement options.
Can a franchisor restrict a franchisee from competing after termination?
Restrictions during the franchise term are generally easier to justify. Post-termination restraints on trade face scrutiny under Section 27 of the Indian Contract Act, which treats agreements in restraint of trade as void to that extent. Confidentiality and protection of brand secrets can still be covered, so drafting should be careful and specific.
Do foreign franchisors face extra rules in India?
Payments abroad, such as royalties and fees, and any foreign investment in the Indian entity are subject to foreign exchange management rules and tax treatment, including withholding. These points should be reviewed along with the agreement so that the payment structure and structure of the Indian operation are compliant.
Is stamp duty required on a franchise agreement?
Stamp duty is levied under the Indian Stamp Act as adapted by each state, so the amount and treatment depend on where the agreement is executed and its nature. Unstamped documents can face difficulty as evidence. We confirm the position for your state before signing and arrange stamping.
Official Sources
Rules, forms and fees change. Check the current position on the official portal:
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Speak with a qualified professional about your franchise agreement drafting requirements.
Last reviewed: . Laws, fees and procedures change; check the official portal before you act.
Disclaimer: The information on this page is for general informational purposes only and does not constitute professional legal, tax or compliance advice. Requirements vary by situation. Please consult a qualified CA or CS for advice specific to your needs. Government fees and timelines are subject to change; verify with the relevant authority before proceeding.