Franchise Agreement
This Franchise Agreement (this “Agreement”) is entered into this ______ day of _________, 2020, by and between ___________________(the “Franchisor”), a ________________________, and ___________________________(the “Franchisee”).
RECITALS
A. The Franchisor is engaged in the business of ___________________________________.
B. The Franchisee desires to engage in the franchise business of ___________________________.
C. The Franchisor wishes to grant the Franchisee the right to use the Franchisor’s trademarks and systems.
NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Franchisor and the Franchisee hereby agree as follows:
1. Grant of Franchise. The Franchisor hereby grants to the Franchisee, and the Franchisee hereby accepts from the Franchisor, the exclusive right and privilege to operate ___________________________, at the described premises (the “Franchise”).
2. Term. The term of this Agreement (the “Term”) shall commence on the date hereof, and shall terminate five (5) years thereafter (the “Term”).
3. Franchise Fee. The Franchisee agrees to pay the Franchisor a franchise fee of ________________ (the “Franchise Fee”) in the form of cash or approved non-cash payment on the date the franchise is granted.
4. Royalties and Fees. The Franchisee agrees to pay to the Franchisor a royalty of _________ (the “Royalty”) on all gross receipts of ___________ as defined in this Agreement. This Royalty shall be payable monthly. In addition, the Franchisee shall be required to pay a fee of ____________(the “Initial Fee”) at the time of franchise renewal.
5. Intellectual Property.
(a) All registered intellectual property, including but not limited to trademarks, trade dress, copyrightable works, slogans and logos, shall be the sole and exclusive property of the Franchisor.
(b) The Franchisee hereby acknowledges that all use of the Franchisor’s Affiliated Intellectual Property is for the sole benefit of the Franchisor, and the Franchisee shall not, either during the effective Term of this Agreement or after its termination, claim, register or use any of the Franchisor’s Affiliated Intellectual Property in any way whatsoever.
(c) The Franchisee shall not engage in any activity whatsoever that, in the sole discretion of the Franchisor, would violate the intellectual property of the Franchisor, including but not limited to, use of the Franchisor’s tradename, logo, trademarks, trade dress, slogans, copyrights, or any similar activity.
6. Training. The Franchisor agrees to provide to the Franchisee training and advice prior to the opening of the Franchise. The Franchisor agrees to provide the Franchisee with promotional materials, point of sale materials, and other services as may be agreed upon by the Franchisor and Franchisee.
7. Limitations. The Franchisee hereby agrees to abide by all provisions and restrictions of this Agreement and the policies and procedures of the Franchisor. The Franchisee shall not, without the prior written consent of the Franchisor:
i. enter into any confidentiality or proprietary information agreements with any third parties;
ii. use any materials, processes, or recipes not previously approved by the Franchisor;
iii. use any trade names, trademarks, copyrights, or logos other than those owned by the Franchisor;
iv. sublicense, assign, or transfer any of the rights, privileges or obligations in this Agreement, or any part thereof;
v. make any representations regarding the Franchisor or its products that are not specifically authorized by the Franchisor;
vi. engage in any competition with the Franchisor; or
vii. engage in any other activities that are not mentioned in this Agreement, but which could reasonably be expected to be harmful to the interests of the Franchisor.
8. Indemnification. The Franchisee shall defend, indemnify and hold the Franchisor harmless from and against all claims, losses, damages, costs, and expenses of whatever kind or nature, including reasonable attorneys’ fees that may be imposed upon the Franchisor by reason of any breach or violation of any of the terms and conditions of this Agreement or any representations in any way related to the Franchise.
9. Default and Termination.
(a) Default by Franchisee. If the Franchisee fails to pay any sums due to the Franchisor hereunder or fails to perform any of its material obligations as required by this Agreement, or if the Franchisee is adjudicated insolvent, the Franchisor shall give written notice to the Franchisee of the default. If the default is not cured within _____ days of the notice, the Franchisor may, in its sole discretion, terminate this Agreement and all rights of the Franchisee hereunder.
(b) Default by Franchisor. If the Franchisor fails to pay any sums due to the Franchisee hereunder or fails to perform any of its material obligations as required by this Agreement, the Franchisee shall give written notice to the Franchisor. If the default is not cured within ____ days after receipt of the notice, the Franchisee may terminate this Agreement.
(c) Default by Both Parties. If the parties are in default of any of their respective obligations hereunder and the default is not cured within ____ days after receipt of the notice, either party may terminate this Agreement.
10. Governing Law; Jurisdiction. This Agreement shall be governed and construed in accordance with the laws of _________ and the parties hereby submit to the jurisdiction of the courts of _________.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date written above.
Franchisor: ____________________________
Franchisee: ___________________________
