What’s the average length of a franchise agreement?

The NatWest/British Franchise Association annual survey for 2009 states that, generally, franchise agreements are for a term of five years. Although some are for longer periods, most are renewable at the end of the term. There are legal reasons why the initial term of a franchise agreement should not exceed five years and, therefore, it’s common to see franchise agreements with an initial term of five years with a right to renew for a further five years.  Some franchisors grant longer terms where the initial investment is greater - for example, 8-10 years. Some franchisors grant very lengthy terms (for example, 20 years) with no rights of renewal. In such cases the franchisor may well offer a new franchise agreement at the end of the 20-year term, but will be under no obligation to do so.  If the franchisee has a right of renewal, this should be set out in the franchise agreement. There are usually conditions attached to renewal, such as the franchisee having performed his obligations under the agreement, refurbishment and re-equipping of the franchise business and the franchisee having entered into a new agreement in the form of the franchisor’s then current agreement.