Each UFOC is required to provide a sample franchise agreement or contract in item 22. You, the franchisor, need at this time to do two things: (1) read the contract yourself and (2) have your attorney read and explain the contract as well. You need to try to develop a working understanding of all the contract language and provisions. In most franchise contracts you will find restrictions on whether the franchisee can transfer the business to someone else including thier children or spouse. Most franchisors have a right of first refusal. Check with your attorney to make sure you understand the terms and conditions of your franchise contract.

The franchise agreement will stipulate the terms and conditions under which the franchisee will operate their franchise.  It will also stipulate any assigned franchise territory as well as all fee structures which have to be paid including the initial franchise fee, the ongoing royalty fees, advertising fees, and possible lease fees. The franchise agreement or contract will generally last for a period of 10-20 years with a renewal clause often for a period of 5 or more years. Check to see if your renewal clause requires the existing franchisee to sign the new "current" franchise agreement when renewing their franchise agreement. The franchise agreement will also list the obligations and operations which the franchisee must perform. This contract may even include the hours of operation when the store will be open.