An good sample of Franchise Agreement that you can DIY.
DATED THIS (insert date) DAY OF (insert month)(insert year)
BETWEEN
[Company Name](COMPANY NO : xxxx )(FRANCHISOR)
AND
(FRANCHISEE)
[Solicitors Name]
[Address]
[Name]
[Address]
Tel :
Fax :
(Ref : )
THIS AGREEMENT is made on the day of 20 between [Company Name]., a private limited company incorporated in Malaysia and having its registered office at [Address] (hereinafter referred to as ‘the Franchisor”) as the one part and _________________________ a private limited company incorporated in Malaysia and having its registered office at (hereinafter called “the Franchisee”) of the other part.
WHEREAS the Franchisor derived its power to sub-franchise from the Principal Franchise Agreement dated ______ (hereinafter referred to as “the Principal Agreement”) for a period of ____ years.
WHEREAS since [name of franchisor] has developed a unique concept of the combination of Snacks, Candy, Confectionery and Health food, based on the concept of modern snack and confectionery, organically its and a list of additional items, all to be served under the Trademark of “[insert brand name]”, and the Franchisee wishes to acquire from the Franchisor the right to become a branch of [insert brand] by abiding to its basic snack and candy items and using the name [insert brand] with its unique Logo and Trademark, for a limited time period, the Franchisor and Franchisee agree upon the following :
NOW IT IS HEREBY AGREED as follows:
1. Introduction :
The above introduction to this agreement and its supplements is an inseparable part of the agreement.
2. Granting the franchise :
2.1 Franchisor is granting the Franchisee the exclusive right to run one (1) branch (referred to below as “the branch”) of [insert brand] in the area defined below, based on the concept and knowledge developed by [brand], and to use the name and Logo of [brand] for that one (1) branch only.
2.2 The branch will be run according to the instructions of this agreement.
2.3 The franchise will start on the day this agreement is signed by the Franchisor and Franchisee, and will remain valid for six (6) years only until its expiration, unless cancelled or terminated according to the instructions of this agreement or according to court ruling.
2.4 This franchise is a limited granting of rights. Upon its expiration or cancellation, all of the Franchisee’s rights to be the branch of [brand] and to use the name [brand] will be terminated.
3. Area :
The area covered by this franchise is ______________________
(Referred to below as “the area”).
4. Guidance :
Within one (1) month after the signing of this agreement, Franchisor will transfer to the Franchisee all the knowledge needed for running the branch. Following this, Franchisor will try to assist the Franchisee through E-mail, Telephone or Fax on various problems and questions.
Franchisor has the right (but is not obliged) to send to the branch a representative who will help, assist & guide the Franchisee.
5. The Rules for running the branch :
As a pre-requisite condition for receiving the franchise, the Franchisee is obliged to the following basic principles of Akiko :
5.1 To sell Only Snack, Candy, Confectionery and Health food based on Akiko’s brand or mark or other brands or marks that are owned by Akiko. The above products will only be in the ways outlined by Akiko, and not to sell any food items that are not included in the Akiko Menu without approval from Franchisor. The Franchisee acknowledges that this is the most basic element upon which the nature of Akiko is based, and understands that selling all other products would results in immediate loss of the right to use the name and Logo of Akiko & immediate termination of the franchise, and could as well result in criminal prosecution, since that would be considered fraud & betrayal of the customers. Franchisor may send a representative at any time without prior warning to take food samples from the branch, to determine if the rules defined in this sub clause (5a) have been adhered to. A breach of this clause is a basic breach of this agreement.
5.2 To keep the price range of the food items within the general reasonable outline defined by Franchisor, and to do his best to abide in general with the reasonable order times that are common in business.
5.3 To keep reasonable standards of service in order to keep the reputation of Akiko, and to maintain books and receipts as required by the law.
5.4 Not to discriminate clients on the basis of race, religion or nationality.
5.5 The Franchisee will pay all the expenses involved with running the branch, including salaries for the employees and advertising expenses. The Franchisee may pay in percentages instead of or in addition to a salary, but this will not give them any rights in the franchise.
5.6 The Franchisee will allow Franchisor and/or its representatives to enter the branch at any reasonable time – in order to guide the Franchisee or his employees or check the activities of the branch. Also, the Franchisee will transfer to Franchisor each year a copy of the annual report, financial report and Income Tax.
6. The Franchise terms and rights ;
6.1 The Franchisee will receive from Franchisor the knowledge needed for running the branch & the Logo sign of the Name. The Franchisee will not be allowed to register aki-ko’s mark and other marks that owned by aki-ko as a trademark or service mark in their country.
6.2 In return for the franchise, the Franchisee will pay Franchisor a royalty fee of :
4% for the 1st year,
3% for the 2nd year,
2% for the 3rd and subsequent years
from gross sales.
6.3 The Franchisee will acquire (or rent) himself the space and equipment, hire the employees, and get the necessary food and candy items for running the branch.
6.4 When the franchise expires or is cancelled for any reason, the Franchisee will return to Franchisor. All the Logo signs of Akiko will cease immediately to use the name Akiko in any way.
7. The nature of relationship between the Franchisor and Franchisee ;
7.1 Franchisor and the Franchisee are independent contractors and will not be considered partners in a joint deal or agents of each other, and there will be no employer-employee relations between them.
7.2 The Franchisee alone is responsible of his actions and/or mistakes and will alone suffer all the consequences if sued by any client or other party for any reason.
7.3 If anyone sues Akiko and/or Franchisor and/or its directors or employees or representatives for any faults that the Franchisee is responsible for, the Franchisee will indemnify them for any expenses or damages caused by this, including legal and lawyer expenses, and including law suits resulting from advertisements or interviews by the Franchisee or by anyone on Franchisee’s behalf.
8. The transfer of rights :
8.1 The Franchisee may not transfer his rights according to this agreement and/’or any parts of them to anyone. A breach of this clause is a fundamental breach of the agreement.
8.2 If the Franchisee is declared bankrupt and/or is appointed receivership, this will be considered breach of the agreement and the franchise will automatically expire.
9. Advertising :
9.1 The Franchisee may advertise the branch locally if needed. However, all the text of the advertisement must be reviewed and approved in advanced in writing by Franchisor.
9.2 Franchisor will provide the Franchisee with guidance and help regarding the proper form and media for advertising. For this purpose, the Franchisee will send Franchisor once in a while through FAX or E-Mail updates on new Advertisement texts or significant changes in the wording. For every text that is not in English, the Franchisee will enclose an English translation.
9.3 All the Franchisee’s advertising activities will be local and all advertising expenses will be responsible by Franchisee.
9.4 The Franchisee will stop or change immediately any advertisement or brochure if instructed so by Franchisor. Franchisor will provide the reason for doing that.
9.5 The Franchisee will not publish any brochure or advertisement that includes elements that may lead to a libel suit by any party. The Franchisee will consult Franchisor in advance for any publication that mentions competitors directly or indirectly (including by way of generalizations such as “we are the best…”, etc.) and will not publish such text without prior written consent from Franchisor. However, in any case the franchisee alone is solely responsible for all his brochures and advertisements and will completely indemnify Franchisor in any case of libel suit caused by this, including all legal expenses. A breach of this clause is a basic breach.
10. The rights to the name and the concept :
10.1 The Franchisee has no implicit or explicit rights in the name Akiko or similar names.
10.2 All the rights & reputation in this name are the sole property of Akiko.
10.3 The right of the Franchisee to use the name Akiko is temporary, according to the terms of this agreement, and he may not use this name or similar ones after the franchise expires or is cancelled.
11. The period of the agreement :
11.1 Unless cancelled by the cancellation instructions detailed in this agreement or by court ruling, the period of the franchise will be six (6) years from the day of signing this agreement.
11.2 Any renewal beyond this period depends on the sole consideration of Franchisor and only a written consent in advance by Franchisor will be considered such an agreement.
12. Obligation not to compete :
12.1 If the Franchisee feels that the branch is not working out and would like to stop the franchise for any reason, he may do so at a three (3) months prior with a notice in writing. However, since the Franchisee confirms that he knows that the concept and methods of Akiko are valuable, he will not sell similar menu items for a period of one year after the cancellation or termination of the franchise.
12.2 On the day the franchise expires or is cancelled for any reason, the Franchisee will return to Akiko all Logos and printed material that carry the name Akiko, and will not continue any further use of them or any parts of them for any purpose.
13. Violations and cancellation of the franchise :
13.1 In case of breach of a non-basic clause of this agreement, Franchisor may cancel the franchise after first giving the Franchisee a thirty (30) days extension to correct the breach.
13.2 In case the breach of a basic clause of this agreement, Franchisor may cancel the franchise without delay. It is agreed that clauses 5.1, 6.2, 8.1 & 9.5 will be considered basic conditions of this agreement.
13.3 The notice of cancellation from Franchisor to the Franchisee will be through A.R.Registered Post, and the cancellation will become active and the franchise will end within seven (7) days after the receipt of the cancellation announcement. Whether the cancellation was initiated by Franchisor or by the Franchisee – in either case all the clauses relating to the cancellation or expiration will be fully adhered to.
13.4 After the expiration or notice of cancellation of the franchise, Franchisor or a representative on its behalf may enter the branch at any reasonable time and confiscate any copies of the Logos and printed material that carry the name Akiko, and the Franchisee will have no claims about it.
14. Limitation of liabilities :
14.1 It is agreed that in any case, the largest sum that any side can claim or sue from the other side, including its employees, directors ad representatives, for any direct or indirect damages including loss of profit or a combination of such claims at one time or at different times during the time of the franchise and after its expiration or cancellation may not exceed a cumulative total amount of 10,000 US$ including legal expenses, and also may never exceed the total net profit (after taxes) that the sued side made until that time from the branch.
14.2 However, this limitation will not apply in case of damages caused to Franchisor by the Franchisee by a breach of clause 7.3 and/or clause 8.1 and/or clause 9.5 and in case the franchisee avoids paying Franchisor the percentages in an amount that exceeds $10,000 over time. This clause is a very basic clause and is the basis for the entire relations between the Franchisor and Franchisee. In case a conflict ever arises between this clause (14.1) and any other clause, clause 14.1 will always overrule.
15. Waivers :
15.1 No concession or delay of action of any kind by either of the Franchisor and Franchisee will be considered waiver of any of their rights according to this agreement and it may not be used by the other side as a precedent to prevent the other side from exercising his rights according to this agreement. Only a document properly signed by both sides may be considered a change in any of the terms of this agreement.
15.2 All the remedies set forth in this agreement request will be considered cumulative.
15.3 Any change in this agreement must be made in writing and properly signed by the Franchisor and Franchisee. Oral variation by the Franchisor and Franchisee must be reduced to writing. Failure which, there is no agreement.
15.4 The Franchisor and Franchisee may not change the terms of this agreement by way of behavior and/or word of mouth and/or documents that were not properly signed by both sides.
15.5 The Franchisor and Franchisee confirm that this agreement reflects completely all that has been agreed upon between them till signing this agreement.
16. Notices :
All notices that are required by this agreement or by law will be sent through A.R.Registered Post to the addresses of the sides. Messages that were sent this way will be considered delivered fifteen (15) days after delivering them at the post office branch. The addresses of the Franchisor and Franchisee are those that are given at the beginning of this agreement or any new address notified registered mail.
17. Jurisdiction :
The validity, constructions, interpretations and enforcement of the franchise agreement and any other documents or agreement contemplated herein and all rights remedies powers, obligations and liabilities hereunder and thereunder shall be governed by the laws of the Malaysia.
18. Interpretation :
The headlines of the various clauses are to be used only as location finders and are not to be used for interpreting the instructions of this agreement.
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THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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AS WITNESS the hands of the agents of the parties hereto the day and year first above written.
Signed by )
On or behalf of the Franchisor )
in the presence of :- )
) _________________________________
[Company Name]
(Company No. )
Signed by )
On or behalf of the Franchisee )
in the presence of :- )
) _________________________________
[Company Name]
(Company No. )
