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This agreement is between a restaurant franchise and a third party interested in becoming a franchisee. This agreement can be fully customized to ensure that the understandings of the parties are properly set forth. Customizable clauses include the name of the franchise, the grant of franchise license, the terms of franchise, the location of the franchised business, license fees, and termination procedure. This agreement can be used by small businesses or other entities that want to grant a license, or obtain a license, to operate a franchised business.
This agreement is between a restaurant franchise and a third party interested in becoming a franchisee. This agreement can be fully customized to ensure that the understandings of the parties are properly set forth. Customizable clauses include the name of the franchise, the grant of franchise license, the terms of franchise, the location of the franchised business, license fees, and termination procedure. This agreement can be used by small businesses or other entities that want to grant a license, or obtain a license, to operate a franchised business. RESTAURANT FRANCHISE AGREEMENT THIS FRANCHISE AGREEMENT (the “Agreement”) is made this ____ day of ___________, 2___, (the “Effective Date”) by and between ___________________, located at _____________________________ (the “Franchisor”) and _____________________, located at ____________________ (the “Franchisee”), hereinafter collectively referred to as (the “Parties”). WHEREAS the Franchisor is the owner and operator of prepared food franchises known to the public as ____________________ (“Franchised Business”); AND WHEREAS the Franchisor’s Business entails certain systems, designs, menus, food, store layouts and equipment which are unique to the Franchisor’s Business; AND WHEREAS the Franchisor is the owner and has all of the right, title and interest in and to the Franchisor’s trade names, service names, trademarks, and service marks used in association with the Franchised Business which is known as _____________________ (the “Intellectual Property”) and which Intellectual Property is registered in the United States Patent and Trademark Office under registration numbers [insert registration numbers for each registered mark]; AND WHEREAS the Franchisee desires to obtain a license from the Franchisor to own and operate a Franchised Business, including the right and license to use the Intellectual Property pursuant to the terms, conditions and provisions contained herein. NOW THEREFORE in consideration of and with the mutual covenants set forth herein the Franchiser and the Franchisee acknowledge and agree as follows: I. GRANT OF FRANCHISE LICENSE 1.01 The Franchisor hereby grants to the Franchisee a non-exclusive license to own and operate a Franchised Business of the Franchisor including the granting of a license to the Franchisee to use the Intellectual Property associated with the Business for the sole purpose of the Franchisee operating a Franchised Business. 1.02 The Franchisee shall open the Franchised Business in the City of ________________, which shall be located at the address known as [include the full street address]. The Franchised Business of the Franchisee shall bear the store number __________. 1.03 The Franchisor hereby acknowledges and agrees that while this Agreement is in full force and effect, the Franchisor shall not at any time; grant a similar license to any other party to operate a Franchised Business within a _________ (___) mile radius of the Franchised Business of the Franchisee. 2 1.04 The Franchisee agrees that it shall at all times, only use the Intellectual Property of the Franchisor associated with the Franchised Business to market and promote its Franchised Business and acknowledges that all Intellectual Property is and shall remain the sole property of the Franchisor. The Franchisee further agrees that it shall at all times use, including but not limited to, all designs, menus, store layouts, recipes, advertising, ingredients and prepared foods as dictated and used by the Franchisor. II. TERM OF FRANCHISE 2.01 The Term of this Agreement shall be for an initial period of _______ (___) years (the “Initial Term”) from the Effective Date unless this Agreement is terminated earlier in accordance with the termination provisions contained herein. 2.02 Upon the expiration of the Initial Term, the Franchisee shall have the option to renew this Agreement for an additional term(s) of ________ (____) years each, (the “Additional Terms”) upon ninety (90) days written notice to Franchisor. Franchisor’s written consent shall not be unreasonably withheld. In the event this Agreement is renewed, all of the terms, conditions and provisions contained herein shall apply and shall remain in full force and effect. III. LOCATION OF FRANCHISED BUSINESS 3.01 The location of the Franchised Business shall be at ______________________ (the “Location”). 3.02 The Franchisee agrees that it shall from time to time, as required by the Franchisor, make any renovations, upgrades and/or alterations to the Location as may be deemed necessary to maintain the integrity of the Franchised Business. 3.03 The Franchisee acknowledges and agrees that the Franchisor shall have the right to enter and inspect the location from time to time, by providing at least _______ (___) hours advance notice to the Franchisee, to ensure that the location and the Franchised Business is being conducted by the Franchisee in accordance with the specifications of the Franchisor. IV. LICENSE FEES 4.01 The Franchisee shall pay to the Franchisor a Franchise Licensing Fee of _______________ ($________) Dollars (the “Franchise Licensing Fee”) for the Franchised Business. 4.02 The Franchisee shall pay the Franchise Licensing Fee to the Franchisor in installments, payable as follows: A. Upon execution of this Agreement, the Franchisee shall pay to the Franchisor by way of cash, certified check, bank draft, wire transfer or direct deposit, _______ Percent (____%) of the Franchise Licensing Fee; © Copyright 2013 Docstoc Inc. 3 B. The remaining ______ Percent (___%) of the Franchise Licensing Fee shall be due and payable to the Franchisor, by way of cash, certified check, bank draft, wire transfer or direct deposit upon the Franchisee successfully completing a training course on the operation of the Franchise Business which shall be completed by the Franchisee no later than _______ (___) days prior to the opening of the Franchised Business. 4.03 The Franchisee shall pay to the Franchisor a non-refundable Advertising Fee of ___________ ($______) Dollars (the “Advertising Fee”) which shall be used for the promotion and advertising of the Franchised Business prior to the opening of the Franchised Business. The Advertising Fee shall be paid to the Franchisor upon the execution of this Agreement. 4.04 The Parties acknowledge and agree that any and all costs and fees associated with the training of any employees for the Franchised Business shall be included in the Franchise Licensing Fee. 4.05 Upon the opening and commencement of the Franchised Business, the Franchisee shall pay to the Franchisor a Monthly Service Charge in the amount of _______ Percent (___%)(“Monthly Service Charge”) of the Franchisee’s gross monthly sales generated from the Franchise Business minus any and sales tax due and payable. The Monthly Service Charge shall be paid to the Franchisor by the ______ day of each and every month. V. BOOKS AND RECORDS 5.01 The Franchisee shall keep its books and records of the Franchised Business accurate and up-to-date and shall keep the books and records of the Franchised Business at the location of the Franchised Business at all times. 5.02 The Franchisor shall have the right to audit the books and records related to the Franchised Business, with reasonable notice, during regular and normal business hours, once every year. VI. FOOD PRODUCTS AND EQUIPMENT 6.01 Any and all equipment to be used by the Franchisee for the preparation and processing of food for the Franchised Business shall be supplied and installed by the Franchisor. Any service repairs which may be required for any equipment supplied and installed by the Franchisor shall be done by a service repair company designated by the Franchisor. The Franchisee agrees that at no time shall it use any other party to service or repair any of the equipment supplied and installed by the Franchisor. 6.02 Any and all food and related products shall be supplied by the Franchisor to the Franchisee. The Franchisee shall ensure that it has at all times, a reasonable amount of stock of food and related products for the smooth operation of the Franchised Business. The Franchisee agrees that it shall not at any time, purchase any food or related products from any other supplier other than the Franchisor. © Copyright 2013 Docstoc Inc. 4 6.03 The Franchisee shall not at any time offer for sale any food or related products which have not been approved or designated by the Franchisor. 6.04 In the event that the Franchisor, for whatever reason, is unable to supply the Franchisee with food or related products after the Franchisee has submitted its orders within the time frames required by the Franchiser, Franchisee may, with written permission of the Franchisor, purchase food or related products from a third party supplier. The Franchisor’s written permission in such circumstances shall not be unreasonably withheld. VII. CONFIDENTIALITY 7.01 The Franchisee acknowledges and agrees that any and all information relating to the Franchised Business or the Franchisor is confidential and shall at all times remain confidential. The Franchisee shall not at any time share or distribute any information relating to the Franchised Business or the Franchisor without the written consent of the Franchisor. 7.02 All books and records of the Franchised Business shall at all times remain confidential and shall not be provided to any other party without the written consent of the Franchisor. VIII. HEALTH AND SAFETY STANDARDS AND MANAGEMENT SYSTEM 8.01 The Franchisee shall keep the Location clean and in a good state of repair and shall maintain the Location in accordance with the laws of the governing jurisdiction in respect to health and safety standards. 8.02 The Franchisee shall adopt the Franchisor’s management system, data record keeping system and the Franchisor’s standards in respect of product preparation, merchandising, employee recruitment, training equipment and facility maintenance and sanitation. IX. DUTIES OF FRANCHISOR The Franchisor shall: A. Assist the Franchisee in all the matters pertaining to pre-opening, opening and initial conduct of the Franchised Business; B. Provide operating procedures to assist Franchisee in developing financial records and controls, production methods, personnel policies and approved sources of supply; C. Provide continuous consultation to Franchisee in all areas of marketing, management, merchandising and general business operations; D. Review all proposed advertising and promotional materials prepared by Franchisee for use in local advertising; © Copyright 2013 Docstoc Inc. 5 E. Revise and update all the operating manuals containing the standards, specifications, procedures and techniques of the Franchised Business; and F. Administer the advertisement and sales promotion fund for the continuous promotion and advertisement of its food products. X. TERMINATION 10.01 This Agreement may be terminated by either the Franchisor or the Franchisee by providing _______ (___) months advance written notice to the other. [Instruction: This provision is optional and should be subject to negotiation. Due to the fact that both Parties will be making a considerable financial investment in the Franchised Business, it is recommended that the Agreement may only be terminated for an uncured breach or pursuant to any of the events set forth in Article X] 10.02 This Agreement shall immediately terminate in the event the Franchisee is found to be in default under any of the terms, conditions or provisions of this Agreement which default is not remedied by the Franchisee within ______ (____) days of the Franchisor providing written notice of such default to the Franchisee. 10.03 In the event this Agreement terminates for any of the reasons set out herein, the Franchisee shall forthwith pay and any and all amounts which may be due and owing to the Franchisor. The Franchisee shall also forthwith cease any and all use of any advertising of the Franchised Business, the Intellectual Property and any methods of the Franchisor used in association with the Franchised Business. Any and all reports, documents, operating manuals or such other material that may be in the possession of the Franchisee shall be immediately returned to the Franchisor without the Franchisee making any copies of same. XI. TRANSFER OR SALE OF FRANCHISED BUSINESS 11.01 The Franchisee’s rights in and to the Franchised Business shall cease and terminate upon the occurrence of any of the following events: A. The death of the Franchisee; B. Insolvency of the Franchisee, or the filing of a bankruptcy petition, either voluntarily or involuntarily; and C. The Franchisee’s sale of all of its assets to a third party without the consent of the Franchisor, or otherwise ceases to operate in its current form. 11.02 The Franchisee may upon receiving written approval from the Franchisor, sell the Franchised Business to any third party. © Copyright 2013 Docstoc Inc. 6 XII. NOTICES Any notice required or permitted to be given hereunder may be effectively given by letter delivered either by personal delivery, registered mail or by electronic means, addressed to the recipient as follows: in the case of the Franchisor: Fax: with a copy to the Franchisor’s Attorney: Fax: in the case of the Franchisee: Fax: with a copy to the Franchisee’s Attorney: Fax: and, in each case, mailed by ordinary mail, postage prepaid, or delivered to that address; and, if mailed as aforesaid, any such notice shall have been deemed to have been given on the fifth (5th) business day following that on which the letter containing the notice was posted. If any notice is given by electronic communication, such notice shall be deemed to be delivered on the day of transmittal thereof if given during normal business hours of the recipient and on the next business day if given after normal business hours. Any party may © Copyright 2013 Docstoc Inc. 7 change its address for service from time to time by notice given in accordance with the foregoing. XIII. GENERAL PROVISIONS 13.01 The Franchisee shall at all times remain an independent contractor of the Franchisor and that by the entering into of this Agreement, no relationship is created between the Franchisee and the Franchisor save and except for the relationship of “Franchisor” and “Franchisee”. Nothing contained herein shall create a partnership, joint venture or employer and employee relationship between the Parties. 13.02 In case of any breach, failure or default to comply with any of the provisions of this Agreement, by the Franchisee, and which remains uncured for the period requisite under the Agreement, Franchisee shall be liable and shall pay to the Franchisor all the damages, costs, compensation and expenses including but not limited to reasonable legal attorneys fees that may be incurred by Franchiser as a result of such breach, failure or default. 13.03 The rights and remedies of the Parties under this Agreement are cumulative, and in addition to and not in substitution for any rights or remedies provided by law. Any single or partial exercise by any party of any right or remedy for default or breach of any term, covenant or condition of this Agreement does not waive, alter, affect or prejudice any other right or remedy to which such party may be lawfully entitled for the same default or breach. 13.04 This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof. The Parties shall be bound or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings not specifically set forth in this Agreement, documents and instruments to be delivered pursuant to this Agreement. The Parties further acknowledge and agree that, in entering into this Agreement and in delivering documents and instruments to be delivered they have not in any way relied, and will not in any way rely upon any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings, express or implied, not specifically set forth in this Agreement or in such schedules, documents or instruments. 13.05 Each provision of this Agreement is intended to be severable. If any provision hereof is illegal or invalid, such illegality or invalidity shall not affect the validity of the remainder hereof. 13.06 Each party shall be responsible for its own legal and other expenses (including any taxes imposed on such expenses) incurred in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement. 13.07 Any party which is entitled to the benefits of this Agreement may, and has the right to, waive any term or condition hereof at any time on or prior to the time when such term or condition is required to be fulfilled under this Agreement; provided, however, that such waiver shall be evidenced by written instrument duly executed on behalf of such party. The waiver by a party of any term or © Copyright 2013 Docstoc Inc. 8 condition hereof shall not operate as a waiver of that party's rights under this Agreement in respect of any other term and condition (whether of the same or any other nature). 13.08 No modification, supplement, termination, waiver or amendment to this Agreement may be made unless agreed to by the Parties in writing. 13.09 This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, administrators, executors, successors and permitted assigns. Nothing herein, express or implied, is intended to confer upon any person, other than the Parties and their respective heirs, administrators, executors, successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. 13.10 This Agreement shall be governed by and construed in accordance with the laws of the State of _______________. 13.11 Each party shall indemnify and hold the other harmless for any losses, claims, damages, awards, penalties, or injuries incurred by any third party, including reasonable attorney's fees, which arise from any alleged breach of such indemnifying party's representations and warranties made under this Agreement, provided that the indemnifying party is promptly notified of any such claims. The indemnifying party shall have the sole right to defend such claims at its own expense. The other party shall provide, at the indemnifying party's expense, such assistance in investigating and defending such claims as the indemnifying party may reasonably request. This indemnity shall survive the termination of this Agreement. 13.12 The Parties hereby agree that any disputes or disagreements respecting the negotiation, performance or interpretation of this Agreement or the transaction to which this Agreement relates, or respecting any claims arising under or in relation to this Agreement or the transaction to which this Agreement relates, shall be resolved as follows: A. The Parties shall attempt to resolve any dispute or claim by dealing with each other directly; and B. In the event that the Parties cannot resolve the dispute or claim within thirty (30) days after the dispute is raised or the claim is made, then each party shall, within thirty (30) days thereafter, appoint an arbitrator, and the two arbitrators so appointed will, within thirty (30) days after their appointment, agree upon the appointment of a third arbitrator. If one party fails to appoint an arbitrator within the thirty (30) day time limit as outlined above, then that party shall be deemed to have forfeited its right to appoint an arbitrator, and the arbitrator appointed by the other party shall appoint one other arbitrator, and both of those arbitrators shall agree upon the appointment of a third arbitrator. Once all three arbitrators have been appointed, the claim or dispute shall be presented by the Parties to the three arbitrators at the earliest time or times designated by the three arbitrators, and the three arbitrators shall resolve the dispute on the basis of a majority decision. Such decision of the arbitrators shall be final and binding on the Parties, and the Parties shall have no further right of appeal to any other party, body, authority or court. © Copyright 2013 Docstoc Inc. 9 13.13 Neither party hereto may assign any or all of its rights and obligations provided for or referred to in this Agreement without the prior written approval of the other party. IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement as of the day and year first written above. [FRANCHISOR] Name: Title: [FRANCHISEE] Name: Title: © Copyright 2013 Docstoc Inc. 10
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