FRANCHISE AGREEMENT

FRANCHISE AGREEMENT

BETWEEN

1. ____________________________________________________________________________

(“THE MASTER FRANCHISEE”)

AND

2. ____________________________________________________________________________

(“THE FRANCHISEE”)

THIS AGREEMENT is made on the ………………….day of …………………….20……………by and between the Master Franchisee and Franchisee(collectively referred to herein as the “Parties” or individually as the “Party” and includes that party’s successors and assigns.

WHEREAS:

1. The Franchisor has developed all the Proprietary Marks and Business Operating Methods to which the Franchisor utilizes in managing its business.
2. The Franchisor has granted to the Master Franchisee, and the Master Franchisee has accepted during the Term of the Master Franchise agreement, the rights to the franchise and licence to: (i) exploit and use intellectual property rights, including without limitation, the trademarks, manuals and ‘know-how’ (franchise system) to develop, establish and operate franchise units in South East Asia; and (ii) grant sub-franchises and sublicense the trademarks and the franchise system to operate franchise units.
3. The Franchisee has agreed to use the Franchisor’s Proprietary Marks and Business Operating Methods to run its business according to the terms of this agreement.

In consideration of the payment of the franchising fee and royalties payable under this agreement, for the use of the Franchisor’s Proprietary Marks, Business Operating Methods, products and the covenants contained herein, the receipt of which is hereby acknowledged, the parties agree as follows:

1. GRANT OF FRANCHISE

The Master Franchisee now grants to the Franchisee, and the Franchisee hereby accepts, the right during the term to open and operate the Franchised Business. The Franchisee shall operate the franchise only per the terms and conditions of this agreement.

• LOCATION

The Franchisee shall open the franchise in the following location;

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• AGREEMENT TERM

The term of this agreement will commence upon execution for ten years.

• FEES

The Franchisee shall pay to the Master Franchisee a Master Franchise fee of $200 per month or $2400 per year. The Master Franchisee shall receive and account for all royalties from all Franchisees and retain its (___________%) and forward the balance, representing (___________%)of Gross sales, to the Franchisee. The Franchisee agrees to subsequent fees such as design fee and marketing fees payable as agreed by the parties.

• ENTIRE AGREEMENT

This agreement contains the entire agreement between the parties and supersedes all prior agreements concerning the subject matter. The Franchisee agrees and understands that the Master Franchisee shall not be liable or obligated for any oral representations or commitments made before the execution hereof or for claims of negligent or fraudulent misrepresentation based on any such oral representations or commitments and that no modifications of this agreement shall be effective except those in writing and signed by both parties. The Master Franchisee does not authorize and will not be bound by any representation of any nature other than those expressed in this agreement. The Franchisee further acknowledges and agrees that no representations have been made to it by the Master Franchisee regarding projected sales volumes, market potential, revenues, profits of the franchise, or operational assistance other than as stated in this agreement or in any disclosure document provided by the Master Franchisee or its representatives.

• RESTRICTIONS
• The Franchisee agrees that other than its franchise licensed herein, neither the Franchisee nor any of the Franchisee’s officers, directors, shareholders or partners, nor any member of his or their immediate fatuities, shall during the term of this agreement have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business.
• The Franchisee shall treat all information including that which comprises or is a part of the Licensed Methods licensed hereunder as proprietary and confidential and will not use such information in an unauthorized manner or disclose the same to any unauthorized person without first obtaining the Master Franchisee’s written consent.
• The Franchisee is prohibited from offering or selling any products or services not authorized by the Franchisor or Master Franchisee. He may, however seek the Franchisor’s or Master Franchisee’s consent in writing. In addition, the Franchisee may only change the franchise location (from the one agreed in clause 2 above) with the consent of the Master Franchisee.
• The Franchisee shall obtain the Master Franchisee’s prior written approval of all advertising or other marketing or promotional programs published by any method, including print, broadcast and electronic media, regarding the franchise. The Franchisee shall also obtain the Master Franchisee’s prior written approval of all promotional materials provided by vendors.
• The Franchisee shall insure the franchise with a viable insurance cover guided by the acceptable standards in similar businesses. The Master Franchisee may, however require the Franchisee to change the insurance cover to its reasonable satisfaction. If the Franchisee fails to pay the insurance when it is due, the Master Franchisee may pay the said sum, and the Franchisee will be liable to refund the Master Franchisee.
• The Franchisee will come up with all the money to open and operate the franchise.
• Beans distributed by the Franchisor shall produce the coffee sold in any franchise.
• The layout of the interior and exterior of the franchise must follow the structure that the Master Franchisee and the Franchisor will provide.

• PAYMENT OF TAXES

The Franchisee shall reimburse the Master Franchisee, or its affiliates and designees, promptly and when due, the amount of all sales taxes, use taxes, personal property taxes, and similar taxes imposed upon, required to be collected or paid by the Master Franchisee, or its affiliates or designees, on account of services or goods furnished by the Master Franchisee, its affiliates or designees, to the Franchisee through sale, lease or otherwise, or on account of collection by the Master Franchisee, its affiliates or designees, of the initial franchise fee, Royalties, Marketing and Promotion Fees or any other payments made by the Franchisee to the Master Franchisee required under the terms of this agreement.

• TRAINING AND ONGOING SUPPORT

The Master Franchisee shall provide the Franchisee with;

• The know-how, technical assistance, services and necessary training to develop, establish and operate the franchise, in the terms agreed by the parties;
• The materials, manuals, guidelines and other documents related to the operation of the franchise; and
• A list of equipment, supplies, approved suppliers, a list of products, and other materials necessary or required to open and operate the franchised units.

The Franchisee will co-operate with the Master Franchisee to facilitate smooth delivery of the training and ongoing support.

• INSPECTION OF FRANCHISES AND OPERATIONS.

The  Master Franchisee will conduct inspections of all of the Franchises in the territory, and its operations, per the standards from time to time established by the Master Franchisee, upon such schedules and according to such procedures as will be agreed upon by the Franchisor and Master Franchisee, acting in good faith, but, in any event, at least once during each calendar quarter, the Master Franchisee will provide reports to the Franchisor concerning the findings of such inspections, in such form and at such times as the Franchisor will require.

1. NO RIGHT TO SET OFF

The Franchisee shall not be allowed to set off amounts owed to the Franchisor or Master Franchisee for royalties, fees, or other amounts due hereunder, against any monies owed to the Franchisee, nor shall the Franchisee, in any event, withhold such amounts due to any alleged nonperformance by the Franchisor or Master Franchisee hereunder, which right of set-off is hereby expressly waived by the Franchisee.

1. DISPUTE RESOLUTION

Any dispute under this agreement shall be resolved through Arbitration. Parties shall act in good faith to resolve the dispute. Nothing in this section shall be interpreted to limit the jurisdiction of the Courts.

1. TERMINATION
2. Either party may terminate this agreement at any time upon breach of the contract by the other party through, among others; Insolvency, bankruptcy, abandonment of the franchise, non-payment, disclosure of confidential information, criminal conviction, non-compliance and misuse of intellectual property.
3. Either party may terminate this agreement upon giving the other party no less than 30 days’ notice in writing.
4. The termination of this agreement shall not discharge the liabilities accumulated by either party.
5. Any clauses intended by the Parties or this agreement to survive the termination of this agreement shall survive the termination of this agreement by whatever cause.
6. Upon termination, the Franchisee should cease using the Franchisor’s trademarks and other intellectual property rights of the Franchisor and must not after that hold itself out as a Franchisee of the Franchisor.

1. VARIATION TO THE AGREEMENT

Either party may request variations to the agreement. Variations will only be effective if agreed in writing, signed by all parties and recorded.

1. Force Majeure
2. For this agreement, “Force Majeure” means an event which a diligent party could not have reasonably avoided in the circumstances, which is beyond the control of a party and includes, but is not limited to, war, riots, civil disorder, earthquake, storm, flood or adverse weather conditions, strikes, lockouts or other industrial action, terrorist acts, confiscation or any other action by government agencies.
3. A Party’s failure to fulfil its obligations due to Force Majeure, shall not be considered as a breach of this agreement, provided that the affected party has taken all reasonable precautions, due care, reasonable alternative measures, and minimal delay all to carry out the terms of this agreement.

1. NO WAIVER

Except where this agreement provides otherwise, the rights and remedies contained in it are cumulative and not exclusive to rights or remedies provided by law.  Failure by either party to enforce any of the terms or conditions of this agreement shall not be a waiver of their right to enforce the terms and conditions.

1. SEVERABILITY

Suppose any provision of this agreement is declared by any judicial or other competent body to be void, voidable, illegal, or otherwise unenforceable; parties may amend that provision or severe it from this agreement. The remaining provisions of this agreement shall remain in full force and effect.

1. NOTICES

The Parties shall be served through the following addresses (including email) for all purposes arising out of or in connection with this agreement. All notices must be in writing. Either party may change the addressees by reasonable notice in writing given to the other party.

THE MASTER FRANCHISEE: ___________________________________________

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THE FRANCHISEE: ___________________________________________

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1. COSTS

Each party shall bear its costs incurred in the negotiation, preparation, and execution of this agreement.

1. GOVERNING LAW

The construction, validity, and performance of this agreement shall be governed in all respects by the Laws of Hong Kong.

IN WITNESS WHEREOF, each of the Parties has executed this agreement, all Parties by their duly authorized officer, as of the day and year set forth below.

Signed by the duly authorized representative of the MASTER FRANCHISEE Signature: Name: Designation: Date:…………………………………………….…………………

Signed by the duly authorized representative of the FRANCHISEE Signature: Name: Designation: Date:…………………………………………….………………..