MASTER FRANCHISE CONTRACT BETWEEN RIVERSIDE LTD AND _________________________________________________________
This Master Franchise Agreement is entered into on this _____Day of ______________________, 20______ between:
- (Name of the Company/owner) whose registered office is at [address, city and country] and Registration number is ___________________________, represented by [name, and position held] (hereinafter referred to as the “Franchisor“),
2. RIVERSIDE LTD whose registered office is at [address, city and country] and registration number is __________________________, represented by [name and position held] (hereinafter referred to as the “Master Franchisee“).
Both parties undertake to observe this Agreement under the following terms:
- That the Franchisor is a service company that engages in the business of buying, selling, and brewing Coffee beans, among other businesses.
- That the Franchisor has developed, as the Master Franchisee acknowledges:
- A specific design for its establishments;
- A management process for its establishments; and
- Guidelines for customer attention,
which together make up the know-how acquired by the Master Franchisee by means of the investment of financial and human resources, in addition to its experience in managing the business to which the present Contract refers. All of this will be referred to in the present Contract as the Franchisor’s “Know-How.”
- That the Franchisor hereby grants to the Master Franchisee the right during the term to open and opérate [Franchised business] and to procure, screen, qualify, train and assist Sub-franchisees to open and opérate [Franchised business], in the development área described in part V.
- That the Franchisor’s know-how is of secret, substantial, and identifiable nature. The “secret” nature is derived from the fact that the Franchisor’s Know-How, in its totality and as the aggregate of its component parts, is not common knowledge, nor is it readily available. The “substantial” nature is derived from the fact that the Franchisor’s Know-How includes important information as to the correct management of the business to which the franchise applies. The “identifiable” nature is derived from the fact that the Franchisor’s Know-How is described in sufficient detail in the preliminary training programs and in the Franchise Handbook, which the Master Franchisee shall receive on signing the present Contract.
- That the activity of the Franchisor is carried out under the auspices of Intellectual Property Rights (trademarks, brands, patents, copyrights, acting as the owner)
- That the Master Franchisee has amassed a great deal of experience in the marketing of the products (Coffee) which are the object of this Contract and such marketing shall be undertaken in the South East Asia región (Singapore, Indonesia, Malaysia, Vietnam, Thailand, and the Philippines).
- That the Master Franchisee wishes the Franchisor to benefit from its business experience and practical know-how and, hence, it undertakes to create and develop a network of franchises in the territory defined in sub-section VI above of this Contract.
- That the Master Franchisee acknowledges its enhanced competitive position in the market, which arises from acquiring the Franchisor’s Know-How, as well as the management of the business under the corporate image of the Franchisor, including Intellectual Property Rights laid out in Section IV above.
- That the Master Franchisee acknowledges that the preliminary market and viability studies that have been carried out, together with the Franchisor, have been calculated upon prudent economic estimates. The Master Franchisee acknowledges that, prior to signing this Contract, it has enjoyed the right to receive from whichever professionals independent legal and financial advice.
- That the Master Franchisee acknowledges the terms and conditions of the present Contract as reasonable and necessary for maintaining the high levels of quality and customer service with which the network of[name of Franchisor] establishments is to be identified and recognized in the market, to the benefit of the Franchisor, Master Franchisee, and all sub-franchisees.
The term of this Agreement shall be for the period of 10 years (10yrs) from the date of commencement of this Contract. Each year of the term, as measured from the date of this Agreement, is “a contract year.”
- MASTER FRANCHISEE’S OBLIGATION
- Master Franchisee shall open, continue to opérate, screen, qualify, train, and assist sub franchises to construct, equip, open and opérate within the development área.
- The Master franchisee shall not be under an obligation to ensure the opening of any specific cumulative mínimum number of sub-franchisers during the term of this Contract. There shall be no mínimum development obligation.
- Each sub- franchise opened within the development área shall be subject to a separate agreement. This Agreement shall be between the Master franchisor and the sub-franchise.
For so long as this Agreement shall remain in effect, the Franchisor shall not grant a franchise to any person or corporation other than the Master Franchisee to opérate any franchise in the development área.
The duties and obligations of the Parties hereunder may be suspended upon the occurrence and continuation of any “Event of Force Majeure’ which inhibits or prevents performance hereunder and for a reasonable start-up period thereafter.
- Within one (1) year following the effective date hereof, The Master Franchisee shall ensure the opening and commencement of operations of an office that shall function as a training facility for sub-franchisor owners and their employees. The parties may also agree to conduct these trainings at the sub-franchisors premises.
- Master franchisee shall train sb-franchise owners and employees in accordance with the standards, policies, and procedures prescribed by the Franchisor in the operations manual and any other written communications from time to time.
- At no additional cost to the Master Franchise, the Franchisor shall cause one or more Company trainers to visit the Master Franchise’s business/office, to provide additional training and operating assistance in connection therewith provided that the timing and Schedule of any such visits, as well as the number of Company trainers, shall be mutually agreed upon by the parties to this Contract.
The Franchisor shall provide to the Master Franchisee within thirty(30) days of signing this Agreement all materials, supplies, and services necessary for the Master Franchisee to conduct the franchised business. This shall include material like a copy of the Franchisor’s sub-franchising manual, a copy of the policies and procedures manual, and all other manuals that may be delivered by the Franchisor to the Master Franchisee.
In connection with the Master-Franchisee’s solicitation of sub-franchisees to opérate franchises, they shall ensure promotion, advertising, and other activities in accordance with state/province laws relating to offering and sale of franchises and compliance with all other applicable laws, rules, and regulations.
- INVESTIGATION AND QUALIFICATION OF PROSPECTIVE SUB-FRANCHISES
Master Franchisee shall investigate the qualifications of prospective sub-franchisees and the suitability of their locations in the development área in accordance with the Franchisor’s standards, policies, and procedures relating to the qualification of sub-franchisees and franchise sites.
After the Master Franchisee is satisfied that a prospective sub-franchisee and prospective franchisee location meet the standards established by the Franchisor, the may proceed to enter into a sub-franchise agreement with the potential sub-franchiser.
- INSPECTION OF FRANCHISES AND OPERATIONS
Master Franchisee shall conduct inspections in the development área, and of the operations of all sub-franchisees, in accordance with the standards from time to time established by the Franchisor. They shall act in good faith, but in any event at least once a month.
If the Master Franchisee finds that the sub-franchise is not in compliance with the necessary standards, they shall make a recommendation on the improvements to be made, and if the sub-franchisee fails to comply with the recommendations within a reasonable time, the Master Franchisee may terminate the Contract.
Sub-franchisee shall participate in all promotions and marketing activities required by the Franchisor in the development área.
- PAYMENTS BY MASTER FRANCHISER AND COMPENSATION FOR SERVICES
- Master Franchise Fee
Master Franchisee shall pay to the Franchisor a Master Franchise Fee of _________________________USD payable upon the execution hereof.
Payment of this master franchise fee is aimed at enabling the Master Franchisee to sell/distribute licenses to sub-franchisors of two types:
- A single franchise license- A license to a sub-franchisor to enable them open one franchise shop in a specified location. This license shall be sold at a fee of 200USD per month.
- A sub-master franchise license- A license to a sub-franchisor enabling them to distribute single franchise locations wherever they wish within a specific region and whatever number they please within that region provided they have the written consent of the Master Franchiser before opening such locations. This license shall be sold at a fee of 2,400 USD per year.
- Master franchisee-Sub-franchisee continuing royalty
The sub- franchisee shall pay to the Master Franchisor a commission of 25% of the total profits their franchisees make every month.
- Franchisor-Master Franchisee continuing royalty
The Master Franchisee shall pay to the Franchisor a monthly commission of 15% of the total commission sums received by the Master Franchisee from the Sub-franchisees.
Master Franchisee shall be regarded as a licensed holder of all trademarks, applications, registrations, and other filings or notices which may be made with respect thereto in any jurisdiction.
The Master Franchiser shall also be considered to be duly authorized to assign such trademarks and other intellectual property rights to Sub-franchisees.
The Master Franchisee and their employees during the term of this Contract shall not either directly or indirectly own, opérate, advice, be employed by or have any interest in any business whether located within or outside the development área that features the same products/services as the Franchisor unless the Franchisor consents to it in writing.
This Contract may be terminated through either of the following ways:
- By the expiry of the term. The ten (10) year term has come to an end, and parties have opted not to renew it.
- Material breach by either Party.
- Insolvency/ Bankruptcy.
- Failure to make payments.
- An Act of God which frustrates or makes the contract impossible to implement.
Any dispute arising out of this Contract shall be submitted to arbitration provide, however, that this clause shall not be construed to limit the parties from bringing any action in Court for any relief under the law that the parties deem fit.
Each Party shall indemnify and hold the other Party and its affiliates harmless from and against any and all claims, proceedings, actions, damages, costs, expenses, and other liabilities or losses.
This Agreement shall be governed by, and construed under the laws of the State of ________________________.
Any disputes arising out of this Agreement shall also be settled by any competent Court of the above-mentioned state.
- If a court finds any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall be interpreted so as to best affect the intent of the Parties.
- This Agreement expresses the complete understanding of the parties with respect to the subject matter and supersedes all prior proposals, agreements, representations, and understandings. This Agreement may not be amended, assigned, or transferred except in writing signed by both Parties.
- Each Party signing this Agreement either directly or through a representative is duly authorized to do so.
- The Parties may execute this Agreement in counterparts, which taken together will constitute one instrument. Execution of a PDF copy will have the same force and effect as execution of an original, and an electronic signature will be deemed an original and valid signature.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
( Authorized Signature)
( Name and Title)
( Authorized Signature)
( Name and Title)
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