This is an agreement between a franchisor and a third party who will serve as an area
director for the development and management of franchises within a specific region.
This agreement can be customized to specify the region that the agreement will cover,
the compensation rate, the length of the agreement, insurance coverage and the
duration of the non-competition clause. Additionally, a detailed description of the area
director’s services is included under “Schedule A” of this agreement. This agreement is
ideal for small businesses or other entities that want to hire an area director to manage
and develop franchises within a particular territory.
SERVICE CENTER FRANCHISOR –
AREA DIRECTOR AGREEMENT
THIS AGREEMENT (the “Agreement”), is made this on ________________, 2___, by
and between ____________________________, with an address of ______________________
(the “Franchisor”) and ___________________________, with an address of
_________________________ (the “Area Director”) collectively referred to as (the “Parties”).
WHEREAS, the Franchisor is in the business of _______________ and seeks to hire
experienced and skilled personnel to assist in the ownership, development and creation
franchised properties with substantial value;
AND WHEREAS, the Franchisor will be establishing _________ (___) franchises (“New
Franchises”) in the [insert area where franchises are to be opened, for example, Southern
California, or the City of Los Angeles];
AND WHEREAS, the Franchisor desires to retain the services of the Area Director for
the purposes contained herein;
AND WHEREAS, the Area Director desires to provide his/her services to the Franchisor
in respect of the New Franchises;
AND WHEREAS, the Parties wish to enter into this Agreement to provide for the terms
and conditions in which the Area Director will provide his/her services to the Franchisor.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Parties hereby covenant and agree as follows:
1.1 The Franchisor shall retain the services of the Area Director for the purposes of business
management, business finance, assisting in the creation, development, supervision and operation
(the “Services”) of the New Franchises as more specifically described in Schedule A. “Area”
shall mean the geographic region which includes [insert the specific area for which this
Agreement shall apply] for which the Area Director shall have certain rights and be
1.2 The Area Director shall render the Services is a professional manner, and at all times in
the furtherance of the objectives of the Franchisor and will do nothing to intentionally harm or
denigrate Franchisor or the New Franchises.
2.1 The Franchisor appoints the Area Director to for an initial Term of _________ (___)
years (the “Term”). The Term shall commence on the ____ day of __________, 2___ and shall
end on the ____ day of __________, 2___. The Term may be extended at the sole option of the
Franchisor prior to the termination of the Term.
2.2 In the event the Franchisor desires to terminate this Agreement, the Franchisor shall
provide the Area Director with __________ (___) days notice of its intent.
3.1 The Franchisor agrees to pay the Area Director a commission of ______ Percent (___%)
of the Franchise Fee for each franchise location established by the Franchisor in the Area.
Franchise Fee shall mean [insert the definition of the Franchise Fee]. Such payment will be
made to the Area Director within ________ (___) days of Franchisor’s receipt of the Franchise
3.2 The Franchisor shall pay the Area Director a commission amount equal to _______
Percent (__%) of the total Gross Income of all of the New Franchises (or a combination of New
and existing Franchises). Gross Income shall men [insert the definition of Gross Income]. Such
payments shall be paid to the Area Director no later than the _____ day of each and every month
with the first payment to be due on the ______ day of _________, 2____.
3.3 In the event the Franchisor receives or increases the fees, commissions, or royalties
which are payable to it by its franchisees to a figure above ______ Percent (__%) of the Gross
Income, then Franchisor agrees to pay the Area Director an amount equal to its pro rata share of
the amount actually received by the Franchisor in excess of _______ Percent (___%)of the Gross
3.4 No payment shall be due to the Area Director for any New or existing Franchises who are
in default under their franchise agreements with the Franchisor.
4.1 In the event of a breach of this Agreement by either party, the non-defaulting party shall
give the defaulting party written notice and thirty (30) days to cure the breach. If the defaulting
party fails to cure such breach the Agreement may be terminated without further notice. In the
event that the Area Director is the defaulting party, a termination of this Agreement will also
result in the termination in any rights to commissions or any other payments that may be due.