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Franchise Agreement
Business Succession

Brands, Designs, Know-How, and More—The Heart of the Franchise Agreement

A franchise agreement is a special type of distribution agreement. A key contractual obligation of the franchisee is the payment of the franchise fee. This often consists of a one-time entry fee for access to the franchise system and the transfer of the necessary know-how, as well as the regular payment of a royalty for the use of intellectual property rights such as trademarks, designs, patents, copyrights, trade names, and the franchisor’s know-how. Franchisees should have a clear understanding of how they are permitted to use and are required to protect the franchisor’s know-how and intellectual property rights. This is because a breach of these contractual obligations can result in substantial claims for damages against the franchisee.

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