What Is a Franchise Agreement?

A franchise contract refers to an enterprise that owns operating resources such as registered trademarks, corporate logos, patents, and proprietary technologies, and licenses the operating resources it owns to other operators (the franchisee) in a contract form. Business activities that operate under a unified business model and pay franchise fees to franchisors. The domestic franchise single store contract can be roughly divided into four components, the contract introduction, the interpretation of key terms in the contract, the main part of the contract, and the annex to the contract.

Franchise contract

Right!

Franchise contract

The specific contents and terms are as follows (note: this is an example of franchise> contract model, each

One,

Franchisor:

Licensee:

The parties agreed on:

Article 1 Purpose

The franchisor grants the licensee the right to commercialize (manufacture) the following products (services) under the franchise, or accepts the implementation of the franchise agreement in the building and in the area specified in Article 4 in accordance with the terms of this contract. ?

Article 2 Legal status of the licensee?

2.1 The licensee carries out his activities as a sole merchant at his own expense. Therefore, he must respect the legal requirements common to all businessmen, in particular the rules on eligibility and social, financial and commercial requirements. As an independent businessman, the licensee shall bear all risks and profit from all profits in respect of his activities. ?

2.2 The licensee is not the franchisor's agent, trading representative, nor his employees or partners. The licensee is not a commission agent for the franchisor. The licensee has no right to sign a contract in the name of the franchisor, so that the franchisor is liable to the third party in any respect, or the franchisor shall bear the cost and bear any obligations. ?

Rights granted under Article 3?

In order for the licensee to operate normally, the franchisor grants the licensee the following rights:

(a) the right to use patterns representing ______ (described), registered as a product (service) in accordance with ______ (the right to use a manufacturing technology registered as a patent);

(b) the right to use ______ names / signs;?

(c) the right to inspect and use the know-how provided in the ______ document as an annex to this agreement

(d) The right to assist the licensee to benefit from technology, commerce, law, and operations during the introduction and operation process, as provided in Sections 5 and 6.

(e) The sale and use of products manufactured by the franchisor (by a designated supplier) means ...?

Article 4 area?

The right to use the franchise granted to the licensee shall be exercised in the areas and buildings set out in Annex 3 to this Agreement. The licensee should not change the address of his building without the prior written permission of the franchisor. ?

Article 5 Specificity?

5.1 During this contract, in the area set out in Section 4, the franchisor undertakes:

Do not grant all or part of this franchise to a third party;

Does not itself engage in all or part of the franchise, nor sells products (services) within the scope of this franchise in a similar way;

Do not supply any third party with all or part of the products (services) within the scope of this franchise. -All persons or companies that control the franchisor legally or in fact, or are controlled by or under common control with the franchisor, are considered third parties.

5.2 During this agreement, the franchisor shall:

Operate franchise alone in the building contained in Article 1;?-Shall not seek customers outside the area specified in Article 4 and products (services) within the scope of the franchise.

Article 6

This agreement is effective on the date of signature for a period of ______ years. This contract is automatically extended for consecutive ______ years, unless the franchisor or licensee gives notice at least ______ months before the expiration of the first period or before each extension. ? By registered mail or any other written delivery method, the date of receipt of the notification can be accurately determined (the date can be used to calculate the notification period). This agreement takes effect on the date of signing, and the period may be uncertain. ? The parties will terminate this contract without the ______ month notice. By registered mail or any other written delivery method, the agent can determine the date on which the notice is received (this date is the starting date of the notice period). ?

Article 7 Goodwill?

The parties shall interpret and perform this contract in good faith, and in particular shall use their best efforts, and shall show each other their prudence, loyalty and cooperation. The parties agree that their relationship is determined to be a cooperative relationship within the scope of the contract. The above clause is a substantive responsibility.

Article 8 compliance with national laws?

Licensee complies with applicable laws and should have the necessary authorization.

Article 9 Quality Standards of Franchisors

The licensee sells (manufactures) the products (services) as set out in Article 1, and guarantees perfect harmony and organization in terms of the brand image of the franchisor network and these conditions. To this end, the licensee shall, in particular, abide by the following provisions:

9.1 Buildings?

1] The licensee shall strictly abide by the conditions stipulated in the franchisor's specifications listed in Annex 4 of this agreement in terms of decoration and building decoration and product (service) display. The franchisor shall give the licensee a rough estimate of the renovation costs no later than the date of signing this agreement. This rough estimate is borne by the licensee. ? During the performance of this agreement, the franchisor will make any major amendments to the above provisions, such as supplementary installation, renovation ... the cost of which shall be borne by the franchisor.

2] While complying with the instructions of the franchisor listed in Annex 4 of this agreement, the licensee shall bear its own expenses to ensure the complete repair of the building.

9.2 Rights granted?

9.2.1 The licensee shall use the industrial and intellectual property rights stipulated in Article 3 in accordance with the listed clauses and within its limits. Licensee shall not use these rights for any purpose other than selling the products (services) listed in Article 1. Nor shall these rights be used for any reason after the termination of this contract.

9.2.2 The licensee shall bear the expenses at its own expense, and shall attach obvious signs of franchising inside and outside the building, including the shop signs that the licensee allows the licensee to use. Without the prior written consent of the franchisor, the licensee may not add other obvious ingredients, no matter how the second paragraph of 9? 2? 3 applies. The cost is borne by the licensee, together with insurance costs, maintenance costs, and related taxes, if any. ?

9.2.3 The licensee shall use the "______" name in all communications, invoices, and commercial and advertising documents used in its activities, in business and things, and in buildings. The licensee can also mark the name of the company and any other legal identity, but there can be no confusion between the franchisor and the licensee. The licensee's identity does not damage the image of the franchisor's name, mark or logo.