CHAPTER 18
Franchise Agreement is a short franchise contract, which is provided for illustrative purposes only. Franchising is a complex business arrangement and should only be undertaken with legal advice. This contract should suggest to you what would be involved in franchising your business overseas. A franchise is a means by which an independent business enterprise may distribute goods or services in connection with a network of other independent owners. Each owner of a franchise will benefit from the support of the central organization, while at the same time have the advantage of being a sole proprietor.
THE FOLLOWING AGREEMENT
Sample Contract: Franchise Agreement This Agreement is made on [date] between [name], [a/an] [specify e.g., individual or type of entity and nationality or place of formation] of [address] (the “Franchisor”), and [name], [a/an] [specify e.g., individual or type of entity and nationality or place of formation] of [address] (“Franchisee”). C O M M E N T : This clause should identify the parties signing the agreement. To ensure that there is no misunderstanding, the full name of each party and the party’s business address should be given. If a party is an entity, partnership, corporation, limited company, or otherwise, the type of entity should be disclosed here. In international contracts, the description of each party includes the party’s nationality. Examples of descriptions: “a Société Anonyme organized and existing under the laws of France,” “a partnership organized and existing under the laws of the State of California in the United States of America,” or “an individual who is a citizen of Singapore.”
RECITALS A.The Franchisor possesses rights under various registered trademarks, service marks, trade names, and styles (including distinctive logos and copyrighted materials in which those items are used), including the name [name of trademark] (“the Intellectual Property”). Further, the Franchisor has promoted the use of and acceptance of the Intellectual Property through its own operations and the operations of its licensees and has developed an international [type of business] system (the System), which is identified with its Intellectual Property and which has public acceptance and good will; and B. The Franchisee desires to become a part of the System and to establish and operate a [type of business] using the Franchisor’s Intellectual Property and good will. Therefore, the Franchisor and the Franchisee agree as follows:
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