Reviewing a franchise agreement before you sign

There is no franchise statute in the United Kingdom, so the franchise agreement is the whole of the relationship: what the franchisee pays, what it may do and where, what the franchisor promises in return, what happens to the business at the end, and what the franchisee may do afterwards. The document is long and is offered as the franchisor's standard form. I review it from the franchisee's side and return it marked up with a written explanation of the changes worth asking for and the terms that need to be understood rather than changed, for a fixed fee of £895 in five working days.

Who this is for

Individuals and companies in England and Wales about to sign a franchise agreement for a food, retail, fitness, care, cleaning, education or services franchise, whether a first outlet or an additional territory, and want to know what they are committing to before paying the initial fee. The franchisee signs as a business, so consumer protection law does not apply to the franchise agreement itself.

What to look for in a franchise agreement

The projections, the disclosure and what you can rely on

Franchisors show prospective franchisees financial projections, existing outlet figures and territory studies, and the agreement will then say that the franchisee has not relied on any statement outside the document. Under section 2 of the Misrepresentation Act 1967 a franchisee induced to sign by a false statement can claim damages, and under section 3 a clause excluding that liability is effective only if it is reasonable. The review lists the statements the franchisee relied on, asks for the material ones to be recorded in the agreement, and marks up the non-reliance clause so that it does not cover the projections the franchisor prepared.

Fees, what you get for them and the supply chain

The initial fee, the management service fee as a percentage of turnover, the marketing fund contribution, and the mark-up on products the franchisee must buy from the franchisor or nominated suppliers together decide the franchisee's margin. The review checks that each fee is defined, that the franchisor's obligations for the fee (training, manuals, systems, launch support, ongoing assistance) are stated as obligations rather than intentions, that the marketing fund is accounted for, and that the franchisor's power to change the fee, the product range or the supplier is limited. A requirement to buy from the franchisor or its nominated suppliers is treated as part of the franchise system and can fall within the exemption in the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022; a term fixing the prices the franchisee charges customers is resale price maintenance and breaches section 2 of the Competition Act 1998.

Territory, exclusivity and online sales

The agreement should define the territory, say whether it is exclusive, and state what the franchisor and other franchisees may not do within it. The review checks the franchisor's own right to sell online or through national accounts into the territory and whether the franchisee receives any share of those sales, whether the territory can be reduced on a missed target, and whether the franchisee may market online at all. It also checks the minimum performance clause, and asks for a shortfall to trigger a cure period and the loss of exclusivity before it triggers termination.

Brand, manuals, data and the customers

The franchisee operates under the franchisor's trade marks, which under section 28 of the Trade Marks Act 1994 need a written licence signed by the proprietor, and follows the operations manual, which the franchisor can change. The review checks that the licence covers the term and the territory, that changes to the manual cannot impose material new costs without notice, and who owns the customer data. Where the franchisor and franchisee both decide how customer data is used they are joint controllers under Article 26 of the UK GDPR and the Data Protection Act 2018, and the agreement should allocate responsibility for privacy notices, requests and breaches rather than leave both exposed.

Premises, the lease and the franchisor's step-in

Where the franchisor holds the lease and grants the franchisee an underlease or licence, or requires an option to take the lease on termination, the franchisee's occupation and its business are tied together. The review checks whether the franchisee's occupation is a tenancy protected by section 23 of the Landlord and Tenant Act 1954 or a licence that is not, whether the franchisor can take the premises and the business on termination, and whether the personal guarantee the directors are asked to give is capped and released on assignment.

Termination, renewal, sale and life after the franchise

The agreement will let the franchisor terminate for breaches that include failing an audit, missing a target, or a change of control, and will require the franchisee on termination to cease trading, de-brand, hand over customer lists and observe a non-compete. The review checks that termination for breach requires notice and a period to remedy, that renewal is a right on stated conditions rather than at the franchisor's discretion, that the franchisee may sell the business to a buyer the franchisor approves on reasonable grounds, and that the post-termination non-compete is limited to the territory and to a period a court would enforce. The Late Payment of Commercial Debts (Interest) Act 1998 applies to sums due between the parties.

What it costs

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The franchisor says every franchisee signs the same agreement and nothing can be changed. Is that true?

It is true of the core terms, and the review tells you what they mean rather than pretending they will move. Franchisors do agree side letters recording specific statements made to you, adjusting territory boundaries, and clarifying renewal and resale conditions, and the review identifies those points.

The projections they showed me are not in the agreement. Does that matter?

It matters a great deal, because the agreement will say you relied on nothing outside it. The review asks for the projections and the statements you relied on to be recorded in a side letter or schedule, and marks up the non-reliance clause so that a misrepresentation claim under the Misrepresentation Act 1967 is not excluded for them.

Can I sell the franchise if it does well?

Only on the terms the agreement sets. The review checks the assignment clause for the franchisor's right of first refusal, the transfer fee, the conditions the buyer must meet and whether consent can be withheld without reasons, and marks it up so that a sale to a suitable buyer cannot be blocked.

Related guidance and services

• Contract review, £895, the service this page describes
• Shareholders agreement, £995
• Employment contracts and handbooks, £595
• Reviewing a distribution agreement from a manufacturer

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.