Legally, parties to a lease agreement need only agree on three points for a valid lease to come into effect — the premises, the rent, and the duration of the lease. However, for a franchisee to trade viably from the premises, other issues must also be addressed, whether the franchisor or the franchisee is the main tenant. By Ian Jacobsberg Franchised businesses can be divided into two main categories with respect to the importance of the type of premises they will require, and where. The category into which a business falls will play a role in how the lease negotiation will be approached and determine the issues that may arise. Area-based franchises These are typically service-type businesses such as real estate agencies, cleaning and repair or distribution services. The franchisee is given a right to service customers within a defined territory and may be limited to trading in that territory. In these businesses, the franchisee generally serves at the customers’ own premises ...