1851

The franchise agreement found at the end of a franchise disclosure document (FDD) is the most important legal document agreed upon by both parties in a franchise sale. It serves as a contract between the franchisor and franchisee, defining their legal relationship and outlining each party’s rights.&nbsp;It’s a common myth that franchise candidates aren’t allowed to negotiate the terms of their franchise agreement; on the contrary, there are actually quite a few opportunities for candidates to negotiate with their prospective franchisors to create an agreement that’s advantageous for both parties.&nbsp;“With limited exception, franchisees have the right to negotiate every aspect of the franchise agreement and its accompanying documents,” said Evan Goldman, Franchise &amp; Hospitality Attorney and Partner at <a href="https://www.aystrauss.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=what-items-are-negotiable-when-buying-a-franchise-2712129" target="_blank" rel="nofollow">A.Y. Strauss, LLC</a>.&nbsp;A best practice when negotiating the terms of a franchise agreement is to ask for reasonable changes, according to Goldman. “Typically, the types of reasonable changes I ask for include the franchisee’s personal guarantee; the bases for termination (particularly what the renewal or transferee agreement will look like); arbitration clauses; and liquidated damages clauses,” he said.&nbsp;Goldman strongly suggested that candidates negotiate termination points with the franchisor. “This area is the one you’re most likely to obtain reasonable changes to and has the most direct impact if it’s drafted too broadly—and it likely is,” Goldman said. “Because if you get terminated for a seemingly avoidable reason, changes to other areas of the agreement—like royalties—are wholly irrelevant.”Additionally, Goldman advises that candidates feel empowered to ask for what they want. “While [franchise lawyers] understand that some franchisors have a ‘no negotiations’ policy, my experience in representing franchisees is that the vast majority of franchisors do not apply that rule in practice,” he said. “At the end of the day, I almost always recommend the franchisee try to negotiate as much as possible, hoping that they’ll get a fairer deal for all parties. In my experience, the upfront negotiations can reduce each party’s litigiousness later on, and avoid unnecessary (and very costly) disputes from arising.”However, even though franchise candidates have the right to negotiate pretty much any aspect of their agreements, it’s a bad idea to be unnecessarily aggressive, Goldman warned. “In my experience, this happens often when franchisees hire non-franchise lawyers to assist them; they ask to change the royalties, the marketing budget or something else that the franchisor will not (and usually cannot) negotiate.”Often, franchise candidates miss the opportunity to negotiate their agreements, resulting in possible disputes between both parties later on. “A fellow franchise attorney once told me that, based on a study conducted, just 26% of all new franchisees hire counsel to assist them through the negotiation process,” Goldman said. “And, I would imagine, just a small percentage of those franchisees hire competent franchise lawyers—this is the biggest missed opportunity. Not hiring a solid, well-rounded ‘franchise lawyer’ can have pretty detrimental effects.”“The fact of the matter is that franchisors have attorneys looking out for their best interests and franchisees should too,” Goldman said. “It only helps reduce both parties' litigiousness later on. Any pre-agreement discussions should be about the need to have a fair relationship, in which both sides have counselors to rely upon in making well-informed decisions.”

Negotiating Items When Buying a Franchise | 1851 Franchise

1851 Franchise

The franchise agreement presented to the candidate isn’t necessarily set in stone—there are some items the candidate can negotiate before signing. 

What Items Are Negotiable When Buying A Franchise?

what-items-are-negotiable-when-buying-a-franchise

Onigilly Japanese Kitchen

Koji Kanematsu Turned a 2,000-Year-Old Japanese Staple Into One of the Most Scalable Restaurant Franchise Models

koji-kanematsu-turned-a-2000-year-old-japanese-staple-into-one-of-the-most-scalable-restaurant-franchise-models

Lindora

Celebrating the Nurse Behind the Mission: How Melinda Endricks Is Powering Lindora’s Growth and Impact Nationwide

celebrating-the-nurse-behind-the-mission-how-melinda-endricks-is-powering-lindoras-growth-and-impact-nationwide

Sola Salons

Sola Salons Targets Chicago for Strategic Franchise Growth

sola-salons-targets-chicago-for-strategic-franchise-growth

Melting Pot

Photo of Melting Pot white chocolate fondue

How Melting Pot Franchisees Drive Year-Round Success Through Strategic Promotions and Local Marketing

melting-pot-franchise-year-round-success

Crust Pizza Co.

Crust Pizza Co. - Technology Piece - CTO Nick Fontenot - May 2025 - 1851 Franchise

Crust Pizza Co. Builds the Future of Franchising With Tech-First Strategy

crust-pizza-co-technology-nick-fontenot-cto

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands - 1851 Franchise

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands

doordash-acquistions-deliveroo-sevenrooms

Crumbl Franchise Investment - TSG Consumer Partners -  1851 Franchise

TSG Consumer Partners Takes Minority Stake in Crumbl, Signaling Franchise Growth Potential

crumbl-franchise-investment-tsg-consumer

Yum Brands Reports Strong Q1 Results with Big Boost from Taco Bell

yum-brands-reports-strong-q1-results-with-big-boost-from-taco-bell

QSR: McDonald’s Gains Momentum With Chicken Innovation, Value Deals and Franchisee Support

mcdonalds-franchise-recovery-chicken-strategy-value-deals-2025

The Future of Franchising: Trends and Predictions for 2025 and Beyond

the-future-of-franchising-trends-and-predictions-for-2025-and-beyond

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

Restaurant Business: Crumbl Cools Its Expansion, Refocuses on Profitability

restaurant-business-crumbl-cools-its-expansion-refocuses-on-profitability

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Franchisee spotlight image with photo of Robert Trujillo and UWRG logo on blue background

How Robert Trujillo Expanded His Construction Business With UWRG

how-robert-trujillo-expanded-his-construction-business-with-uwrg

District Taco Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-district-tacos-franchise-costs-fees-profit-and-data

The Ultimate Guide to Selling Franchises: Building Your Brand’s Growth Machine

ultimate-guide-to-selling-franchises

What Items Are Negotiable When Buying A Franchise?

MORE STORIES LIKE THIS