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A Franchise Agreement is a binding contract that lets business owners (franchisors) license their brand, business model, and operational know-how to other parties (franchisees). In Hong Kong, these agreements typically cover trademark rights, quality standards, territory limits, and operational procedures that franchisees must follow.

The agreement spells out key commercial terms like initial fees, ongoing royalties, and marketing contributions. It also details important obligations under Hong Kong law, including disclosure requirements, competition rules, and intellectual property protections. Both sides rely on this document to understand their rights, responsibilities, and the specific ways they'll work together to grow the business.

Use a Franchise Agreement when expanding your successful business model through other operators in Hong Kong. This legal framework becomes essential once you're ready to license your brand, systems, and know-how while maintaining control over quality and consistency across locations.

The timing is right when you have proven business processes, protected intellectual property, and documented operational standards. Many Hong Kong retail chains, restaurants, and service businesses rely on these agreements to grow their presence without the capital investment of opening company-owned locations. Getting this agreement in place early helps avoid disputes and protects both parties' interests during the franchise relationship.

• Franchise Contract: The standard master agreement covering core business operations, brand standards, and payment terms for new franchise relationships.
• Franchise Transfer Agreement: Used when an existing franchisee sells or transfers their franchise rights to a new operator, ensuring continuity of obligations.
• Sub Distribution Agreement: A specialized variation for franchises focused on product distribution, detailing territory rights and supply chain requirements.

• Franchisors: Business owners who license their brand, systems, and know-how to others. They draft initial agreements, monitor compliance, and provide ongoing support.
• Franchisees: Local operators who invest in and run the franchised business, following the franchisor's system while maintaining day-to-day control.
• Legal Counsel: Hong Kong lawyers who draft, review, and negotiate Franchise Agreements to ensure compliance with local laws.
• Business Advisors: Financial and operational consultants who help evaluate franchise opportunities and structure deals.
• Regulatory Bodies: Government agencies that oversee franchise operations and enforce relevant business regulations.

• Business Details: Gather complete information about your brand, business model, and operational procedures that franchisees must follow.
• Financial Terms: Define initial fees, ongoing royalties, marketing contributions, and payment schedules.
• Territory Rights: Map out exclusive operating areas and any territorial restrictions in Hong Kong.
• Quality Standards: Document specific requirements for maintaining brand consistency and service levels.
• Legal Requirements: Use our platform to generate a compliant agreement that includes all mandatory Hong Kong franchise provisions and intellectual property protections.
• Operational Support: Detail training programs, ongoing assistance, and supply chain arrangements.

• Parties & Scope: Clear identification of franchisor and franchisee, plus detailed description of the licensed business system.
• Grant of Rights: Specific trademark licenses, territory boundaries, and duration of the franchise.
• Financial Terms: Initial fees, ongoing royalties, marketing contributions, and payment schedules.
• Operational Standards: Quality control requirements, training obligations, and compliance with Hong Kong regulations.
• IP Protection: Trademark usage rules, confidentiality provisions, and trade secret safeguards.
• Termination Rights: Clear conditions for ending the agreement and post-termination obligations.
• Dispute Resolution: Hong Kong jurisdiction, mediation procedures, and arbitration provisions.

A Franchise Agreement differs significantly from a Business Acquisition Agreement. While both involve business expansion, their core purposes and structures serve distinct needs in Hong Kong's commercial landscape.

• Ownership Structure: Franchise Agreements maintain separate ownership between franchisor and franchisee, while Business Acquisition Agreements transfer complete ownership and control to the buyer.
• Ongoing Relationship: Franchising creates a continuous partnership with regular oversight, support, and royalty payments. Acquisitions typically end the relationship after the sale closes.
• Brand Control: Franchisors retain strict control over brand standards and operations. Acquirers gain full autonomy to modify the business.
• Legal Obligations: Franchise Agreements include detailed operational requirements and ongoing compliance standards. Acquisition Agreements focus on transfer terms and post-closing covenants.
• Risk Distribution: Franchisees share operational risks while using a proven system. Acquirers assume all business risks and opportunities independently.