How long does a franchise agreement last for?

The great majority of franchise agreements in the UK last for five years. A small number last for longer - seven to 10 years - and an even smaller number last for 20 years. The latter tend to be franchise agreements that are very expensive to set up in terms of property refurbishment costs, and so they are linked to the duration of the lease.  Some agreements may last less than five years, but it is doubtful whether such agreements would be considered to be franchise agreements because franchisees have to have a guaranteed period in which they can recover their initial investment and hopefully make a profit.  In addition to the initial term, franchisees should have an automatic right to renew the franchise agreement on expiry of the term. This right should not be lost for minor breaches and the right should not be subject to a substantial payment to be made by the franchisee to the franchisor.  The British Franchise Association’s view is that franchisees on five-year terms should have two ‘automatic’ renewals and franchisees on 10-year terms should have one.