Is there anyone who can help me draft a franchise agreement?

Hello. This is an attorney experienced in fair trade cases at Daeryun Law LLC.

When preparing a franchise business, one of the particularly important documents is precisely the 'franchise agreement'.

A franchise agreement is a core document that governs the legal relationship between the franchisor and the franchisee, and it serves as the legal basis that clearly sets out the rights, obligations, and responsibilities of the franchise business transaction.

Therefore, when drafting the agreement, you must comply with the Fair Trade Commission's 「Act on Fair Transactions in Franchise Business (the Franchise Business Act)」, and you must set out the detailed provisions specifically so as to prevent future disputes.

A franchise agreement should generally include the following matters.

First, content concerning the basic structure of the franchise business.

You must clarify matters such as the right to use the trade name and business marks, the scope of the business territory, whether exclusive rights exist, the procedure for opening a franchise store, and the conditions for commencing business.

Since the know-how, menu, and trademarks provided by the franchisor are protected as 'the franchisor's intellectual property rights', a clause prohibiting their unauthorized use and modification is also essential.

Second, provisions on the monetary transaction relationship.

You must specifically state the basis for calculating various costs, such as the franchise fee, training fees, royalties, and advertising costs, as well as the timing of payment and the possibility of refunds.

In particular, you must distinguish between the initial franchise fee and the ongoing royalties, so that the franchisee can clearly know the amount they will bear.

Third, the franchisor's support and management obligations.

You must list in detail the matters the franchisor must provide, such as interior design guides, menu training, and publicity and marketing support, and if there are regular inspections or evaluations, you must also specify their procedures and standards.

Fourth, clauses concerning the termination of and breach of the contract.

The conditions under which the franchisor may terminate the contract if the franchisee damages the brand image or breaches the contract, and conversely the procedure by which the franchisee may terminate the contract due to reasons attributable to the franchisor, must both be included in a balanced manner in the contract document.

Provisions regarding key money, facility investment costs, and the handling of inventory upon termination must also be specifically stipulated in order to reduce disputes.

Fifth, protection of the business territory and the conditions for contract renewal.

Restrictions on opening new franchise stores within the same area, the contract renewal procedure, and the handling of business rights after the contract term expires are sensitive matters from the franchisee's perspective, so they must be drafted carefully in accordance with the Fair Trade Commission's standard franchise agreement criteria.

Finally, it is also important to specify the procedure for resolution in the event of a dispute.

By clearly stipulating matters such as the competent court, the conciliation or arbitration procedure, and the basis for calculating the penalty for breach in the event of a dispute, you can prepare for unexpected legal disputes.

A franchise agreement is a legal mechanism that protects the franchisor's brand value and secures the franchisee's trust.

If you consult with an attorney experienced in fair trade cases from the initial design stage, you will be able to prevent future unfair trade disputes or contract termination problems.

Daeryun, Korea's ninth-largest law firm (based on 2025 National Tax Service value-added tax filings), is a legal partner that provides one-team legal services led by highly experienced attorneys.