Franchise Agreement

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A franchise agreement is an agreement between the rightholder and the user, according to which the rightholder undertakes to provide the user, for a fee, with the right to use in entrepreneurial activities a complex of exclusive rights, business reputation and commercial experience belonging to the rightholder, including the right to a trademark and other intellectual property objects provided for by the agreement. 

Only commercial legal entities and individual entrepreneurs can be parties to the contract, because the contract is always concluded for the purpose of conducting business activities aimed at generating profit. 

A franchise agreement is a type of a license agreement in which the subject of the agreement is a set of IP objects. 

The main characteristics of a commercial concession agreement:

  • The rights to a complex of several types of IP are transferred; 

  • Mandatory presence of at least one trademark; 

  • A wide range of rights and obligations to maintain good quality; 

  • The agreement is subject to mandatory registration; 

  • The user of the agreement has the preemptive right to renegotiate the agreement;

 A franchise agreement is always concluded for the purpose of conducting entrepreneurial activities aimed at generating additional profits.

What are the advantages of concluding a franchise agreement?

Franchising is capable of generating significant profits for both the copyright holder and the user. By concluding a franchise agreement, for example, you can acquire a ready-made business at your disposal. This way, you can bypass many of the initial stages of starting a business. In addition, buying a ready-made business is a way to save time and effort, to buy a company with contractors, customer base, premises and employees.


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