AGREEMENT BETWEEN A FRANCHISER AND FRANCHISEE GRANTING FRANCHISE RIGHTS WITH RIGHT TO APPOINT SUBFRANCHISEES IN THE TERRITORY ALLOTTED
THIS AGREEMENT made at____________..on this.................. day of 2000 between XYZ Company PIc, a company incorporated under the ____________..Act and having its registered office at____________..USA, hereinafter called"the Franchiser" (which expression unless it be repugnant to the context or meaning thereof be deemed to mean and includes its successors and assigns) of the ONE PART and ABC Company Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at____________.. hereinafter called "the Franchisee"(which expression unless it be repugnant to the context or meaning thereof be deemed to mean and includes. its successors and assigns) of the OTHER PART.
WHEREAS
(1)The Franchiser is a well established and reputed multinational company operating in 35 countries of the world, doing the business of "Mc International" brand high quality food products of various countries;
(2) The Franchiser has, through its experience and extensive research, developed many famous food products which have become very popular in different countries of the world;
(3)As the Franchiser has not been able to operate itself from various countries of the world and appointed franchisees in various countries of the world to run the retail outlets to sell the famous food products of Mc International brand, so that the products of the Franchiser may be sold throughout the world;
(4)The Franchiser has prepared a manual named "Mc International Business Systems and Operations Manual" which contains the details of know?how and business system of the Franchiser, hereinafter called the "Manual", which is the sole property of the Franchiser. The said manual, inter alia contains the details of outlet lay out, staff uniform, requirement of staff of the outlet, job description of the staff of the outlet, training requirement of staff, standard of food products to be served in outlet, cleaning requirements, Menu of outlet, guidelines for fixing rates of items, complaints, grievance procedure, Equipments to be used in manufacturing products, opening hours, minimum stock requirements, etc.;
(5)The Franchiser is desirous to extend the sale of its food products to various other countries and it has negotiated with various Indian Entrepreneurs, who were interested to undertake Franchise business of the Franchiser. After negotiations, the Franchiser has decided to appoint the Franchisee as Franchisee for undertaking Franchise business in India;
(6)The Franchiser declares that it owns the registered and unregistered trade and service marks in U.S.A. and various other countries of the world and has not appointed any Franchisee to undertake the franchise business in Mc International food products in India;
(7)The Franchiser has intimated to the Franchisee that the market of Mc International food products in India will be developed by hard work, prompt and efficient, satisfactory and courteous service of the Franchisee, as there are variety of food products of different systems in India;
(8)The Franchiser has also advised the Franchisee that it has to exploit the big territory of India, and for that purpose has to appoint 50 franchisees within a period of 2 years from the date of execution of this agreement and it has to attain the target fixed for the franchise business in India within a period of 5 years;
(9)The Franchisee has no experience in dealing with food products, but he has the experience of business of different products and has sufficient finance for undertaking the franchise business in India and it has also assured the Franchiser to develop the Franchise business in India.
NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:
In consideration of the Franchise and Management Service Fees hereinafter reserved and of the Franchisee's agreement hereinafter contained, the Franchiser hereby GRANTS to the Franchisee the exclusive right to carry on the business of Mc International Food Products with the trade mark of the franchiser (hereinafter called the "said business") with the right to use in the said Business the designs, plans, systems, specifications, know?how in the territory of India, (hereinafter called the "the territory").
(2) This agreement shall subject to the provisions of clause....____________below relating to termination of agreement, subsist for a period of 15 years commencing on the____________..day of____________.. 2000. If the Franchisee regularly pays Franchise and Management Service Fees hereby reserved and observe and perform all the covenants and conditions of this agreement, the Franchiser shall on the written request of the Franchisee made three calendar months before the expiration of the term of this agreement grant to the Franchisee a renewed right to do the said franchise business for further term as may be desired by the Franchisee but not exceeding years from the expiration of the terms of this agreement on the terms and conditions mutually agreed to between the parties at the time of renewal
(3) The Franchisee shall pay to the Franchiser the lump sum of$ 1,00,000 as Franchise and Management Service fees as follows:?
(i) $ 50,000 on the execution of these presents;
(ii) $ 25,000 after three months from the date of these presents;
(iii)$ 25,000 after six months from the date of these presents.
The Franchisee shall also pay a Franchisee fee at the rate of 10% of the total value of all invoices rendered by all the Franchisees during any accounting year. The Franchisee fee shall be paid monthly by the Franchisee to the Franchiser on or before the 10th day of the month following the month to which the fee relates. The Franchisee shall not deduct or set off against any fee payable to the Franchiser any sums which the Franchisee considers to be due to him from the Franchiser entitled. In case of default in the payment of any sum in time, the Franchisee shall, without prejudice to any other remedy that the Franchiser may have under this agreement, or in law, pay interest @ 2% per month or part of the month on the amount of any sums due but not paid.
(4) The Franchisee hereby agrees and confirms that it will furnish to the Franchiser not later than 7 days after the end of each monthly accounting period, written detailed summary showing the aggregate and gross invoice value of all products sold by all the Franchisees during the accounting period with calculations of the fees. payable by the Franchisee in respect thereof together with a copy of each invoice rendered during the accounting period. The Franchisee will keep the accounts of all franchisees for a period of three years from the completion of the accounting year, for audit and inspection by the representatives of the Franchiser.
(5) The Franchisee hereby agrees that it shall, within four months after the end of the each financial year, furnish to the Franchiser a consolidated balance sheet and Profit and Loss account of all
franchisees in the territory certified by a Chartered Accountant relating to the franchise business.
(6) The Franchiser hereby undertakes that it will give training to the General Manager and other employees of the Franchisee in the operation of the said business. The training will be for a duration of 3 weeks and will be conducted at the place of the Franchisee. The Franchiser will also give training of the same duration to the General Managers and employees of the first ten sub?franchisees appointed by the Franchisee. The training to General Managers and employees of the sub?franchisees will be conducted at the Franchisee's place. The Franchisee will pay to the Franchiser (J) full salary of three weeks of the General Manager, Manager and Supervisor who will be deputed for imparting training for 3 weeks (h) return economy class air fares and all other travel expenses to and from and within the place of training (iii) Hotel expenses for stay of the Franchiser's trainers in three star hotel (iv) Fixed allowance @ $ 250 as halting allowance per day payable to all the trainers.
(7) The Franchiser hereby covenants with the Franchisee as follows:?
(i) To provide the copy of the Manual with English translation thereof, the copyright of the same shall remain with the Franchiser;
(ii) To render advice relating to establishment and efficient operation of the said Business;
(iii) To render advice to the adaptation of the Business to the requirements of India;
(iv) To provide operational support for a period of 6 weeks from the commencement of the business by the Franchisee by deputing well qualified staff viz. One General Manager, One Supervisor and One Assistant Manager to assist the launching and efficient operation of the said business by the Franchisee:
Provided that the Franchisee shall pay the following amounts for the operational support
- (a) $ 10,00, as the pay roll costs of the staff deputed attributable to the period of their visit to the Franchisee place,
- (b) Return Economy class air fares and other travel expenses to and from and within the said territory,
- (c) Payment of hotel bills for the staff deputed in 3 star Hotel,
(d)
