A franchise agreement generally governs a location (store, restaurant, real estate office, hotel or other business) and is normally signed before the location is opened. In some systems one agreement may cover the operation of multiple locations.
Another common type of franchise-related agreement is a development agreement. Sometimes referred to as an area development agreement, this type of agreement allows a franchisee (in the agreement, a “developer”) to lock up a certain geographical area (city, county etc.) for a certain period of time while they identify suitable locations, sign franchise agreements for them and “develop” those locations into functioning units of the franchise system. Normally the development agreement involves a series of deadlines by which a certain number of units must be opened, also known as a “development schedule.” Depending on the franchisor’s standard form of agreement, the development agreement may expire at the end of the schedule or may expire or be subject to termination if any one deadline is missed. In that way, the development agreement is similar to an option agreement for the purchase of tangible or intangible property.
A master franchise agreement involves the right of a master franchisee to subfranchise the business to third parties but still usually involves one agreement per franchised or subfranchised location. This type of agreement is more commonly used by U.S. franchisors in international markets. A licensing agreement is similar but generally allows the licensee to open (and possibly close) outlets without separate agreements. There are many variations on how these agreements are drafted; if you find yourself working in an environment involving license or master franchise agreements you would want to read up on them in addition to reading up on franchise law in general.