A franchise agreement is drafted entirely by the franchisor, and most terms are largely non-negotiable — which makes the review before signing the single point where a prospective franchisee has the most ability to understand, and occasionally push back on, what they're committing to.
Fees go well beyond the initial franchise fee
Ongoing royalty fees, marketing fund contributions, required purchases from approved suppliers, and technology or software fees all add to the real cost of operating — reviewing the complete fee structure, not just the headline franchise fee, is essential before signing.
Territory protection (or lack of it)
Some agreements grant an exclusive territory; others allow the franchisor to open additional locations nearby with little restriction. Understanding exactly what territorial protection, if any, is included avoids an unwelcome surprise once you're operating.
Termination and renewal terms
Franchise agreements typically specify grounds for termination by the franchisor, renewal conditions and fees, and post-termination restrictions like non-compete obligations — these terms often matter more to a franchisee's long-term outcome than the initial signing terms.
The Franchise Disclosure Document is the real starting point
Federal law requires franchisors to provide a detailed disclosure document before signing, covering litigation history, financial performance representations, and franchisee turnover — reviewing this alongside the agreement itself is what gives a prospective franchisee the fullest picture before committing.