Franchise Agreement Format
Grant a franchisee the right to run a business under your brand and system, with clear fees, territory, standards and exit terms.
What it is
A franchise agreement lets a franchisee operate a business using the franchisor's brand, trade marks, know-how and operating system, in return for an initial fee and ongoing royalty. India has no separate franchise law, so the agreement is governed by the Indian Contract Act, 1872, trade mark law for the brand licence, and competition and tax law. The agreement sets the territory, fees, training and support, quality control, audits, confidentiality, non-compete and what happens on termination.
When it is used
- A brand expanding through franchised outlets.
- Master franchise or area development arrangements.
- Formalising an existing informal licence of a brand.
What the template covers
- Grant of franchise, brand and territory
- Initial franchise fee and ongoing royalty
- Marketing levy and minimum sales target
- Training, manuals, supplies and quality standards
- Audit rights, reporting and confidentiality
- Term, renewal, termination and post-term obligations
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Agreement
Agreement Date; Place
Franchisor
Franchisor Name; Address; GSTIN; Brand / Trade Mark Name
Franchisee
Franchisee Name; Address; Franchisee PAN; Franchisee GSTIN
Scope
Type of Franchise; Franchised Territory; Business / Products Covered
Financial
Initial Franchise Fee (₹); Ongoing Royalty (% of Net Sales); Royalty Payment Frequency; Marketing / Advertising Levy (% of Net Sales); Minimum Annual Sales Target (₹)
Term
Initial Term (years); Renewal; Governing Jurisdiction
Stamp duty, registration and filing
GST applies to the franchise fee and royalty. The franchisee deducts TDS on royalty and fees for technical services: Section 194J up to 31 March 2026 and Section 393 of the Income-tax Act, 2025 from 1 April 2026; payments to a foreign franchisor need withholding under the provisions for non-residents and FEMA reporting. Non-compete clauses that operate after the agreement ends may be unenforceable under Section 27 of the Contract Act. Stamp duty depends on the State of execution.
Generate the Franchise Agreement
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows? Contact SKAG and Associates
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Frequently asked questions
Is a franchise agreement required to be registered?
There is no registration requirement for a franchise agreement in India, but it must be properly stamped. Registering the trade mark protects the brand being licensed.
Is GST payable on franchise royalty?
Yes. GST is charged on the franchise fee and royalty; check the current rate on cbic-gst.gov.in.
Can a franchisor stop a former franchisee from competing?
Restrictions during the term are generally enforceable. Restraints after the agreement ends are often void under Section 27 of the Indian Contract Act, though confidentiality obligations can continue.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.