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GLOSSARY

Area development agreement definition

Published by a LexisNexis Commercial expert

What does Area development agreement mean?

An agreement which a franchisor and an operator enter into where the operator is required to operate franchise outlets itself within a designated area and may not sub-franchise to third parties.

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The franchise agreement

This Practice Note considers the principal matters a franchise agreement should address including clarity over the rights to be granted to the franchisee and the relevant territory, whether the franchise can be granted on an exclusive basis, ensuring full consideration is given to the sales targets and development plans, the licensing of intellectual property rights and availability of trade names and domain names. The Practice Note also highlights the importance of a well drafted manual and the key areas a manual should cover.The structure and content of a franchise agreement are similar to those of a distribution (reseller) agreement although there is a much greater focus on how the franchise is operated to ensure uniformity and consistency. The principal matters a franchise agreement should address are set out below.Grant of rightsThe rights to be granted to the franchisee should be clearly set out in the agreement; each party should be clear what it hopes to achieve. How far these, as the other terms of the agreement, can be negotiated by...

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