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Checklist 6 of 10
Legal Review & Franchise Agreement
Your attorney is not optional — this section requires professional guidance.
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Selecting your franchise attorney
Confirmed attorney specializes specifically in franchise law
Verified attorney is NOT a general business or real estate attorney
Confirmed attorney has reviewed agreements in this specific franchise system (preferred)
Confirmed attorney is licensed in the state where I will be operating
Received a fee estimate for full FDD and agreement review ($2,500–$5,000 typical)
Engaged attorney BEFORE making any commitments or paying any fees
Key agreement provisions to review
Initial term length confirmed
Renewal terms, conditions, and fees fully understood
Post-renewal agreement terms — are they the current standard agreement?
Territory type confirmed (exclusive, protected, or merely preferred)
All territorial carve-outs identified — online, alternative channels, company units
Geographic definition of my specific territory confirmed in writing
Right of first refusal on adjacent territories confirmed (if applicable)
Royalty rate and basis confirmed (% of gross sales)
Marketing/brand fund contribution rate confirmed
All other ongoing fees listed, confirmed, and accounted for in my financial model
Required vendor relationships and all sourcing restrictions reviewed
Termination & default provisions
Grounds for franchisor-initiated termination fully understood
Cure period for monetary defaults confirmed
Cure period for operational defaults confirmed
Provisions that eliminate cure rights after repeated violations identified
Conditions under which termination can occur WITHOUT a cure period noted
Termination without cause provisions reviewed
All consequences of termination fully understood
Transfer & exit provisions
Transfer fee amount confirmed
Franchisor approval requirements for transfer fully confirmed
Right of first refusal provisions reviewed and understood
Right of first refusal exercise window confirmed (days)
Training obligations for incoming buyer confirmed
Transfer process timeline reviewed as realistic for a future sale
Non-compete provisions
In-term non-compete scope reviewed (geographic area and activities covered)
Post-term non-compete duration confirmed
Post-term non-compete geographic scope confirmed
Activities covered by post-term non-compete fully understood
Non-compete applicability if franchisor terminates without cause reviewed
State law on non-compete enforceability confirmed with attorney
Entity structure & personal guarantee
Personal guarantee requirements fully understood
Whether spouse/partner signature is required confirmed
Scope of guarantee (limited vs. blanket) reviewed and negotiated if possible
Business entity type selected and established (LLC, S-Corp, or C-Corp)
ROBS requirement for C-Corporation structure confirmed (if using ROBS)
Entity formation completed BEFORE signing the franchise agreement
EIN (Employer Identification Number) obtained for the new business entity
Negotiation items
Identified top 3–5 provisions to request modification on
Attorney has framed all modification requests professionally and in writing
All agreed modifications are IN the signed agreement — not verbal promises
All verbal commitments from the franchisor confirmed in writing
No modifications accepted unless documented in the executed agreement or addendum
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