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Home / IP & Legal / Franchise Agreement
Last updated: 2 October 2026
A franchise agreement lets others run your business model under your brand while you keep control of quality. Expertvuw’s team drafts franchise agreements covering trademark licensing, fees, territory, training, audits and exit, for franchisors and franchisees.
India has no dedicated franchise law, so a franchise relationship is governed mainly by the Indian Contract Act, 1872, the Trade Marks Act, 1999 (for licensing the brand), the Copyright Act, 1957 (for manuals and materials), competition law, tax laws and — for foreign franchisors — FEMA rules on royalty payments.
A franchise agreement typically covers the grant of rights and territory, the initial franchise fee and ongoing royalties, the trademark licence and quality control, operating manuals and training, supply arrangements, marketing contributions, audits and reporting, term and renewal, termination events, and what happens after exit — de-branding, return of materials and confidentiality.
GST applies to franchise fees and royalties. Restrictive terms should be checked under the Competition Act, and post-termination non-competes need care because of section 27 of the Contract Act. Having your trademark registered before franchising is important.
Basis: Indian Contract Act, 1872; Trade Marks Act, 1999 (licensing and registered users); Copyright Act, 1957; Competition Act, 2002; CGST Act, 2017; FEMA for cross-border royalties. Last updated: 27 September 2026.
Governed by contract, IP, competition, tax and FEMA laws.
Register the brand before franchising.
Franchise fees and royalties attract GST.
Needed to keep the trademark licence valid and the brand consistent.
Post-termination restrictions need care under section 27.
Royalty remittances follow FEMA and tax withholding rules.
Franchise disputes usually concern money and exit.
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Franchise agreements connect with these services.
Registering your brand first.
Licensing and recording rights.
Distribution arrangements.
Checking restrictive terms.
Understand the franchise model.
Agree fees, territory and term.
Prepare the agreement and licence terms.
Parties review and negotiate.
Stamp and sign.
Use the agreement for audits and renewals.
Manage the franchise relationship actively.
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Share your query and our team will reply during business hours.
No specific law; franchising is governed by contract, trademark, copyright, competition, tax and FEMA laws.
Yes. A registered trademark makes licensing and enforcement much stronger.
Yes. Franchise fees and royalties attract GST.
Post-termination non-competes need care under section 27 of the Contract Act; confidentiality and de-branding terms are enforceable.
Yes, subject to FEMA rules and tax withholding.
ACS – Director, Expertvuw Management Pvt Ltd
Agreements and policies are drafted by Expertvuw’s team for your review and negotiation. Where you need a legal opinion, dispute advice or representation, it is provided by independent advocates. Expertvuw is a corporate services company, not a law firm.