Franchise Agreement

This Franchise Agreement is for use where one party, the franchisor, wishes to effectively licence out its business to another, the franchisee. The licence gives the franchisee the right to operate that business on an exclusive basis in a particular area as delineated in a Schedule to the Agreement, i.e. the franchisor may not appoint any additional franchisee/s in that area. 

This form of agreement is only suitable for use where both parties are based in and operate in the UK, and the franchise is to be operated by the franchisee only in a part of the UK - the “Territory” is defined in the Agreement as a specific part of the UK. In any other case, i.e. where the arrangements will have any non-UK aspect, you should take legal advice about exactly what is proposed and as to what would be suitable terms of agreement for the circumstances.

The trade marks and other features used by the franchisee in its territory and by the franchisor's other franchisees in other territories within the UK confer a distinct common identity on all branches of the franchised business for the benefit of the franchisor and all of its franchisees.

In return for being permitted to use the trade marks and other intellectual property of the franchisor, the franchisee will pay a fee.

This document is compliant with the GDPR (General Data Protection Regulation).

Franchising offers advantages to both the franchisor and the franchisee. The franchisor is able to grow its business without having to open, staff, and manage new premises, branches or outlets itself. The franchisee on the other hand is able to manage what is effectively its own business, which has been tested by the franchisor already, and is able to make reasonable use of the franchisor’s expertise and experience.

This Agreement will ensure that any confidential information, which will include commercially sensitive information and trade secrets, is protected from unauthorised disclosure, thereby protecting the interests of the franchisor.

In addition to the provisions of this template, the franchisor will also need to provide a “Manual”. This is basically a rule book, which will provide all of the necessary detail required for the successful day-to-day running of the franchised business, such as minimum standards and insurance requirements. By providing that certain details are specified in such a Manual, this Agreement ensures that there is added flexibility in the ongoing relationship. A template Manual is also available.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

This Franchise Agreement contains the following clauses:

1. Definitions and Interpretations
2. Grant of Franchise
3. Relocation
4. Term and Renewal
5. Fees and Payment
6. Obligations of the Franchisor
7. Obligations of the Franchisee
8. Use of Intellectual Property
9. Initial Set Up
10. Procurement and Services
11. Records and Accounts
12. Training and Quality Control
13. Advertising and Marketing
14. Insurance
15. Confidentiality
16. Non-Competition and Non-Solicitation
17. Termination
18. Effects of Termination or Expiry
19. Liability
20. Data Protection
21. Data Processing
22. Notices and Service
23. Force Majeure
24. Waiver
25. Non-Exclusivity of Rights etc.
26. Relationship
27. Rights of Third Parties
28. Assignment and Succession
29. Entire Agreement
30. Severance
31. Set Off
32. Expenses
33. Governing Law and Jurisdiction

and schedules:

Schedule 1: Franchised Business
Schedule 2: Intellectual Property
Schedule 3: Territory
Schedule 4: Equipment
Schedule 5: Raw Materials
Schedule 6: Products
Schedule 7: Each Party's Privacy Notice
Schedule 8: Mandatory Policies

[Schedule 9: Disclosure Letter]

Attach the Manual.

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