A franchise agreement is a legal document that sets out the terms and conditions under which a franchisor grants a franchisee the right to use its trademark, trade name, and business system. It is a crucial document that defines the entire relationship between the franchisor and the franchisee. But the question is, must a franchise agreement be in writing? Let`s explore.

In most cases, a franchise agreement must be in writing. The reason is simple: a written agreement ensures the terms and conditions of the franchise are clear, enforceable, and legally binding. Without a written agreement, misunderstandings can arise, and both the franchisor and franchisee are left in a vulnerable position.

Moreover, many countries have laws that require a franchise agreement to be in writing. In the United States, for example, the Federal Trade Commission (FTC) requires franchisors to provide a Franchise Disclosure Document (FDD) to prospective franchisees. The FDD must contain detailed information about the franchisor’s business, the franchise system, the franchise fee, and ongoing royalties, as well as the franchise agreement. The agreement must be in writing and must comply with state and federal laws.

However, some countries do not require a franchise agreement to be in writing. In those cases, it is still advisable to have a written agreement to protect both parties` rights and interests.

In summary, a franchise agreement should be in writing to protect the franchisor`s and franchisee`s interests. It also ensures the terms and conditions of the franchise are clear, enforceable, and legally binding. However, some countries may not require a written agreement, but it is still advisable to have one. As a professional, it is essential to stress the importance of a written agreement in any franchise relationship for the benefit of the franchisor and franchisee.