Franchise Glossary
Term (Franchise Term)
What is Term (Franchise Term) in franchising?
The initial length of a franchise agreement, most commonly 10 years, though some brands use 5-year or 20-year terms. After the initial term, the franchisee typically has the option to renew if they are in good standing. The term clock starts at signing, not at the unit's opening date. A 10-year term on a business that takes 18 months to ramp up means roughly 8.5 years of productive operating time before renewal or exit decisions arise.