A Franchise Operating Agreement (FOA) is a contract between franchisors and franchisees that outlines the duties and obligations of both parties. It’s an essential document that defines the relationship between the two entities and governs aspects such as how products will be branded, how profits will be distributed, and what type of training and support the franchisor will provide. The FOA is also important to prevent any misunderstandings or disputes arising from the business partnership. By signing the agreement, both parties agree to fulfill their respective obligations in order to make the partnership successful.