Negotiating Franchise Agreements in Virginia: What Every Franchisor and Franchisee Should Know ⚖️
Negotiation is a natural part of business. Deals of all kinds involve back-and-forth—terms are proposed, refined, and settled on in a way that balances the needs of both sides. Yet in franchising, negotiation is sometimes overlooked or even discouraged.
Some franchisors negotiate frequently, while others rarely do. And in some cases, negotiation is ignored altogether—sometimes under the mistaken belief that strict uniformity requires every agreement to be identical, other times simply as a matter of internal policy or preference.
Virginia law takes a very different approach. Under the Virginia Retail Franchising Act (VRFA), franchisors are required to provide every prospective franchisee the opportunity to negotiate all provisions of the franchise agreement. This doesn’t mean that every requested change must be accepted, but it does mean that negotiation cannot be denied. Refusing that opportunity isn’t just poor business practice—it creates a legal right for the franchisee to void the agreement entirely under Va. Code § 13.1-565 (Voidable franchises).
Virginia’s Negotiation Requirement 📜
Section 13.1-565 of the Virginia Code provides that a franchise agreement may be declared voidable by the franchisee if:
The franchisor unlawfully offered the franchise.
The franchisee was not afforded the opportunity to negotiate all provisions of the agreement.
The franchisee was not given the agreement and disclosure documents at least 72 hours prior to execution.
The law specifically states:
“The franchisee was not afforded the opportunity to negotiate with the franchisor on all provisions within the franchise, except that such negotiations shall not result in the impairment of the uniform image and quality standards of the franchise…”
This provision is straightforward:
✅ Franchisors must open every provision to negotiation.
🚫 Franchisees cannot demand changes that undermine brand image or quality standards.
So while a franchisor does not have to accept proposed changes, they must provide a genuine opportunity for dialogue. If they don’t, the franchisee may void the contract within 30 days of signing by sending written notice via registered or certified mail.
Why Virginia Is Different 🏛️
At the federal level, the FTC Franchise Rule sets the baseline requirements for all franchisors in the United States. That rule focuses on disclosure—making sure prospective franchisees receive the Franchise Disclosure Document (FDD) with enough time to review it before signing—but it does not require franchisors to allow negotiation.
In practice, this means that outside of state-specific laws, whether or not a franchisor negotiates is a matter of business practice and brand policy. You may have been told that franchise agreements cannot be negotiated, but that is simply not true. There are certainly changes that are not advisable, but there is no blanket prohibition.
Virginia law layers an additional safeguard on top of the FTC’s disclosure requirements. Recognizing that franchise agreements are long, complex contracts drafted entirely by franchisors, the General Assembly gave prospective franchisees a statutory right to negotiate. Under the Virginia Retail Franchising Act (VRFA), franchisors must provide the opportunity to negotiate all provisions of the franchise agreement, with the only limitation being that changes cannot undermine the system’s uniform image and quality standards.
This does not mean Virginia is “anti-franchisor.” Instead, the statute aims to balance the scales. The goal is to preserve system integrity while ensuring fairness, transparency, and informed decision-making in franchise transactions. In effect, Virginia law stacks negotiation rights on top of the federal disclosure regime—making the state one of the most franchisee-protective jurisdictions in the country.
Why This Matters for Franchisors 🔑
For franchisors offering franchises in Virginia, this rule is more than a formality:
Every provision is negotiable
That includes royalties, advertising contributions, territory rights, renewal terms, transfer restrictions, and more. Even if your business would never agree to alter certain items, you must permit the franchisee to raise them.Refusing to negotiate is risky
A flat “we do not negotiate” stance can expose you to a claim that the agreement is voidable. Allowing proposals and responding thoughtfully is critical to protecting your contracts.Uniformity still protected
You are not required to allow changes that compromise the system’s image, products, or quality standards. Virginia’s statute preserves those safeguards.
What This Means for Franchisees 💡
For entrepreneurs considering a Virginia franchise, this rule works in your favor:
You have the right to be heard
Whether it’s territory carve-outs, dispute resolution mechanisms, or payment terms, you have the right to try to negotiate every part of the agreement.Your window is limited
If you believe you were denied the chance to negotiate, the law gives you 30 days post-execution to declare the agreement void by certified mail. After that window, your right expires.Be strategic in requests
Franchisors don’t have to agree, and negotiation should focus on the areas that most impact your long-term operations and economics.
The Balance Between Flexibility and Consistency ⚖️
Virginia’s law strikes a balance:
It prevents franchisors from presenting franchise agreements as untouchable, one-sided contracts.
It preserves the franchisor’s ability to protect trademarks, products, and system standards.
It ensures franchisees have a meaningful seat at the table, even if not every request is granted.
In practice, this often means negotiation centers on economic and legal terms (fees, territories, renewal periods), while brand standards remain uniform across the system.
Key Takeaways 📍
Virginia law requires negotiation opportunities — not just permits them.
Franchisees may void an agreement within 30 days if this right is denied.
Franchisors should engage in good-faith dialogue while protecting brand standards.
Franchisees should use their statutory right strategically and within deadlines.
How Waldrop & Colvin Can Help 🏢
Whether you’re a franchisor preparing Virginia-compliant agreements or a franchisee reviewing proposed terms, understanding this negotiation requirement is essential. At Waldrop & Colvin, we help clients:
Structure agreements and processes that comply with Virginia law
Negotiate key business and legal terms while protecting system integrity
Advise franchisees on how to exercise their rights under § 13.1-565
Contact An Attorney Today!
Derek A. Colvin
Derek is a graduate of Penn State Law and Old Dominion University. He started his legal career in 2009 and currently serves business clients as a partner at Waldrop & Colvin, the law department for your business. His practice focuses on SMB client legal services and franchise law.
Derek is laser-focused on delivering efficient and effective solutions for business legal needs. As a seasoned litigator and experienced business attorney set on thinking critically and communicating effectively, Derek is well-suited to advise and protect your business.
