Franchise Contract Template

Franchise Agreement

This Franchise Agreement is for use where one party, the franchisor, wishes to effectively licence out his business to another, the franchisee. In return for being permitted to use the trade marks and other intellectual property of the franchisor, the franchisee will pay a fee.

Franchising offers advantages to both the franchisor and the franchisee. The franchisor is able to grow their business without having to open, staff and manage new premises, branches or outlets themselves. The franchisee on the other hand is able to manage what is effectively their 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 secret, is protected from unauthorised disclosure, 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.

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. Notices and Service
21. Force Majeure
22. Waiver
23. No Partnership
24. Assignment
25. Entire Agreement
26. Severance
27. Set Off
28. Expenses
29. 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

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