Food Franchise Renewal Terms: Everything You Need to Know
Owning a food franchise is a lucrative business opportunity, but every franchise agreement comes with a fixed duration. To continue operating under the franchise brand, renewing the franchise agreement is essential.
Whether you’re an existing franchisee or considering investing in a food franchise, understanding the renewal terms, conditions, and fees can help you plan for long-term success.
In this blog, we’ll cover:
âś… What is a food franchise renewal?
âś… Key renewal terms and conditions
âś… Common fees and costs
âś… Process of renewing a franchise agreement
âś… Best practices for a smooth renewal process
If you want to ensure a seamless transition when renewing your franchise contract, this guide is for you!
1. What is a Food Franchise Renewal?
A food franchise renewal is the process of extending your franchise agreement after its initial contract period ends.
🔑 Key Points About Franchise Renewal:
✔️ Time-based contracts: Most franchise agreements last 5-10 years before requiring renewal.
✔️ Not automatic: Franchisees must apply for renewal and meet certain conditions.
✔️ Renewal terms vary: Each franchisor has different criteria, fees, and conditions.
✔️ Opportunity to upgrade: Renewal allows franchisees to adopt new policies, menu updates, and branding changes.
đź’ˇ Franchise renewal ensures long-term partnership and business continuity under a trusted brand name.
2. Key Terms & Conditions for Franchise Renewal
Common Renewal Terms in a Franchise Agreement
Before renewing a food franchise, franchisors evaluate the franchisee’s performance, financials, and compliance with brand guidelines.
Here are some common renewal terms:
âś… Performance Review: Franchisees must meet sales targets, customer satisfaction, and operational standards.
✅ Compliance with Brand Guidelines: Store design, menu consistency, and service quality must align with the brand’s current policies.
âś… Franchise Fee Payments: All previous royalty and franchise fees should be cleared.
âś… Location Evaluation: If the current location is underperforming, the franchisor may suggest relocation or store revamping.
âś… Updated Agreement Terms: New contract terms may include higher fees, revised royalties, and updated operational policies.
đź’ˇ Franchisees who maintain good business performance and follow brand guidelines have a higher chance of smooth renewal.
3. Franchise Renewal Fees & Costs
Franchise renewal often involves certain fees and investment costs. These vary depending on the franchisor’s policies.
 Common Fees in Franchise Renewal
Fee Type | Estimated Cost (Varies by Brand) |
Renewal Fee | â‚ą2-10 Lakhs |
Franchise Fee Reassessment | May be revised in the new agreement |
Training & Rebranding Fee | â‚ą1-5 Lakhs (if required) |
Marketing Contribution | 2-5% of annual sales revenue |
Store Upgradation Cost | â‚ą5-15 Lakhs (if applicable) |
✔️ Some franchisors offer discounts on renewal fees for well-performing franchisees.
✔️ Additional investment may be required for new equipment, store renovations, and technology updates.
💡 It’s important to review the new financial requirements before committing to a renewal.
4. How to Renew a Food Franchise Agreement?
The franchise renewal process typically follows these steps:
đź“ť Step-by-Step Renewal Process
🔹 Step 1: Check Renewal Eligibility
- Review the contract expiration date and eligibility criteria.
- Ensure all dues, royalties, and operational standards are met.
🔹 Step 2: Submit Renewal Request
- Apply for renewal at least 6-12 months before the contract ends.
- Submit financial reports and performance records.
🔹 Step 3: Franchise Evaluation
- The franchisor reviews the franchise’s sales performance, customer feedback, and compliance.
- A store inspection may be conducted to check operational quality.
🔹 Step 4: Agreement Review & Negotiation
- Discuss new terms, fees, and any updated policies.
- Evaluate if any store modifications or menu changes are required.
- 🔹 Step 5: Sign the New Contract & Pay Fees
- Once agreed upon, sign the renewed franchise agreement.
- Pay the renewal fee and any additional charges.
🔹 Step 6: Training & Implementation
- Attend refresher training sessions if required.
- Upgrade the store design, menu, and technology as per the new guidelines.
đź’ˇ Starting the renewal process early prevents last-minute issues and ensures business continuity.
5. Best Practices for a Smooth Franchise Renewal
To avoid challenges during renewal, follow these best practices:
✔️ Track Contract Expiry Dates: Stay informed about contract duration and renewal deadlines.
✔️ Maintain Strong Business Performance: Meet sales targets and customer service expectations.
✔️ Follow Brand Guidelines: Keep up with menu updates, marketing policies, and store design changes.
✔️ Build a Good Relationship with the Franchisor: Strong communication helps in negotiating better renewal terms.
✔️ Plan for Financial Requirements: Keep funds ready for renewal fees, upgrades, and training costs.
đź’ˇ A well-prepared franchisee can secure a hassle-free renewal and continue business growth.
Frequently Asked Questions (FAQs)
If you don’t renew, you must stop using the brand name, trademarks, and business model as per the franchise agreement.
It’s best to apply 6-12 months before contract expiration to allow enough time for processing and negotiation.
Yes, franchisees with strong performance records may negotiate fees, royalties, and operational requirements.
Some franchisors require store updates to align with new branding and operational guidelines.
Renewal costs vary, but typically include a renewal fee (â‚ą2-10 Lakhs), store upgrade costs, and training expenses.
To apply for a franchise, contact us today and our team will guide you through the process.
Final Thoughts
Renewing a food franchise agreement is essential for maintaining a profitable business under a recognized brand. By understanding the key terms, fees, and requirements, franchisees can ensure a smooth and beneficial renewal process.
At Skyland d Global, we provide clear and transparent renewal policies for our franchisees. Our brands—Kathi Nation, La Trio Pizza, The Burger Nation, Bhartiyam’s, and Waffle King—offer structured support for franchise renewals, ensuring continued success.
 Interested in a long-term food franchise partnership? Contact us today to explore renewal options!