As part of your franchise agreement, you grant your franchisees the right to establish and develop their franchise locations, and in return, franchisees agree to set up and maintain their franchise operations in accordance with your system`s mandates and to pay you certain ongoing fees. Each franchisee must sign the franchise agreement, and the franchisor will also sign the document. A word of warning, a franchise agreement is a binding legal document and you may want a franchise lawyer to review it on your behalf before signing it. A franchise agreement is a legal and binding agreement between a franchisor and a franchisee. In the United States, franchise agreements are enforced at the state level. Finding Important: Federal law requires the disclosure of 23 key points about a franchise, set out in a franchise backgrounder, before the money is exchanged. .