What’s the length of a normal franchise agreement?

The usual length of a franchise agreement is between five-eight year s. The British Franchise Association Code of Ethics provides that ‘duration of the agreement”¦should be long enough to allow the individual franchisee to amortise his initial franchise investment’.  Although the bfa recognises that for a minority of the largest franchise opportunities amortising the initial investment may not be a primary objective for the franchisee, the length of time is affected by the amount invested and the attitude of lending sources, which will be concerned to ensure that the franchisee will have enough time to repay loans and still feel he has an asset worth all the effort. Some franchisors do not grant too long a term in the belief that there may be developments in the law to which they would like to respond sooner rather than later.  Some franchisors grant a 20-year term with no right to renew. In any event, it is the invariable practice to grant franchisees an option to renew, provided the franchisee has performed his obligations under the agreement, updates, refurbishes and re-equips the franchised unit and enters into a new agreement in the form of the franchisor’s then current agreement.