Master Franchise Agreement

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At a Glance

A Master Franchise Agreement is a legally binding contract between a franchisor and a master franchisee. It grants the master franchisee the rights to operate and sub-franchise within a defined territory.

The agreement sets out clear terms around brand usage, operational standards, financial commitments, and legal obligations. By doing so, it protects both parties—ensuring that the franchisor’s brand integrity is maintained while giving the master franchisee the structure and authority needed to expand the business.

This type of agreement is an essential tool for franchisors, franchisees, and legal professionals, as it clearly defines roles, responsibilities, and rights, while providing a framework for sustainable and controlled growth.

A well-drafted Master Franchise Agreement allows franchisors to expand their brand through sub-franchising while maintaining quality control and brand integrity. provides clarity and legal protection, reducing risks and ensuring smooth business operations. This document is beneficial when:

  • A business owner is granting rights to a franchisee to operate under their brand.
  • A franchisee is purchasing the rights to use a brand’s intellectual property and business model.
  • Both parties need to establish clear operational and financial expectations.
  • Legal professionals require a standardised agreement for franchise arrangements.
  • There is a need to protect trademarks, trade secrets, and brand reputation.

A Franchise Agreement is a crucial document for defining franchise relationships, ensuring both parties understand their obligations, and reducing the risk of legal disputes. It is particularly valuable for lawyers, franchisors, business owners, and franchise consultants who need a structured and enforceable contract.

INCLUDES

Master Franchise Agreement Includes:

Information Statement

Legal Drafting Bookelt

Schedule

Franchise Checklist

Disclosure Document

Full Commentary with Update

Contents

1               DEFINITIONS

2               ACKNOWLEDGEMENTS

3               COVENANTS

4               GRANT OF MASTER 

5               CONDITIONS PRECEDENT

6               TERM & TERMINATION

7               DUTIES OF THE FRANCHISOR

8               DUTIES OF THE MASTER 

9               RECRUITMENT  

10             AUTHORITY TO GRANT 

11             MEETINGS

12             REPORTING

13             FRANCHISE FEES

14             SUPPLY OF STOCK

15             PRODUCT WARRANTIES

16             DUTIES OF THE MASTER 

17             ADVERTISING, MARKETING 

18             DEFAULT

19             INSURANCE & INDEMNITY

20             FINANCIAL REPORTING

21             INSPECTION AND AUDIT  

 

22             CONFIDENTIALITY

23             OPERATIONS MANUAL

24             ASSIGNMENT

25             TERMINATION

26             EFFECT OF TERMINATION

27             NON-COMPETE

28             FRANCHISING CODE  

29             RELATIONSHIP OF PARTIES

30             ENTIRE AGREEMENT

31             GOVERNING LAW

32             FORCE MAJEURE

33             INTERPRETATION

34             DISPUTE RESOLUTION

35             SERVICE OF NOTICES

36             WAIVER

37             SEVERABILITY

38             COST AND (STAMP) DUTY

39             FURTHER ASSURANCE

40             INJUNCTION 

41             WARRANTIES  

42             DIRECTORS GUARANTEE 

1. General Law Governing Franchising

The term ‘franchising’ is normally used in connection with either a business format
form of franchise or in connection with a product and trade mark franchise. Under a
business format form of franchise, the Franchisor grants to the franchisee not only
the right to use the franchisor’s trade marks but also the right to use an entire
business format in accordance with which the franchisee must carry on their
business.

Franchising in Australia is governed by the Franchising Code of Conduct. The
Franchising Code of Conduct is a mandatory industry code of conduct that has the
force of law under the Competition and Consumer Act 2010 (Cth).

The definition of ‘franchise agreement’ in the Franchising Code of Conduct is
wide. An agreement exhibiting the features specified in Clause 4(1) of the Code, will
be a franchise agreement for the purposes of the Code.

2. The Code

The Franchising Code of Conduct is contained in a Schedule to the Trade Practices
(Industry Codes — Franchising) Regulations 1998 (the Code). A Franchising Code
of Conduct compliance manual for franchisors and master franchisees is available
free of charge from the Australian Competition and Consumer
Commission website www.accc.gov.au.

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This does not represent legal advice by Precedents Online or its authors.

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