What is a contract granting rights to operate a franchise called?

A contract granting rights to operate a franchise is known as a Franchise Agreement. This document outlines the specific terms and conditions under which a franchisee can use the franchisor's brand, trademarks, and business model. It typically includes information about fees, operational guidelines, training, support, duration of the franchise, and any obligations the franchisee must fulfill. This agreement is crucial for establishing the legal relationship between the franchisor and franchisee, ensuring that both parties understand their rights and responsibilities.

In contrast, a Partnership Agreement governs the terms under which two or more individuals operate a business together, detailing profit-sharing, management responsibilities, and other partnership dynamics. A Sole Proprietorship refers to a business owned and operated by a single individual without the formal structure of a franchise or partnership. An Operating Agreement is primarily used by LLCs (Limited Liability Companies) to outline the management structure and operating procedures, not specifically for franchises. Therefore, the Franchise Agreement is the most accurate term for a contract that grants rights to operate a franchise.