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In the video, the speaker discusses the franchise agreement, which is a critical document accompanying the Franchise Disclosure Document (FDD). The franchise agreement is the legally binding contract signed by both the franchisor and franchisee, outlining the franchisee's obligations and the franchisor's tools for enforcement. It typically prioritizes the franchisor's interests and specifies obligations related to support and training at the franchisor's discretion. The speaker emphasizes the importance of discussing future growth plans with clients to incorporate flexibility in the agreement, allowing them to reserve rights that align with their long-term objectives.