FRANCHISEE AGREEMENT

THIS AGREEMENT made on ____day of ______, 20xx, by and between M/s ____________________X Y _Pvt. Ltd, located at _________________________________________, hereinafter referred to as “The Franchisor", and Name__________, located at,_________________________________ here in after referred to as “The Franchisee".

DEFINITIONS

In this Agreement the following bold terms shall have the meanings set forth below, unless the context otherwise requires:
(i) A “X Y Z”(TM) Branded Product is any product now existing or developed in the future that bears Franchisor's Marks and is sold by some or all “X Y Z” Franchisees or Franchisor or other entities which may be decided upon by the Franchisor from time to time.
(ii) A “X Y Z” Franchisee or Distribution Point is any system, where Authorized “X Y Z” Products & services using Franchisor's Marks are sold, such as Computer, Computer repair, Computer components & raw materials, Computer accessories, kiosks or other product distribution systems developed now or in the future and authorized by Franchisor.
(iii) A “X Y Z” Franchisee is a point that specializes in the sale of Authorized “X Y Z” Products, as defined below, is operated under Franchisor's Marks, as defined below, and is authorized by a Franchise made or approved by Franchisor.
(iv) A “X Y Z” Franchisee is primarily a Computer, Computer repair & Computer accessories premises that exists primarily for the abovementioned services.
(v) Authorized Products or “X Y Z” Authorized Products are products approved or authorized by Franchisor in accordance with the provisions of this Agreement.
(vi) L1 repair of Computer includes any software repair/installation done by the Franchisee. L2 repair of Computer includes any hardware repair/replacement done by the Franchisee. L3 repair of Computer includes any kind of mother board repair done, including component level or chip level repair done by the Franchisor.

WHEREAS, Franchisor is the owner of the trademark "“X Y Z”", under the Trade And Merchandise Marks Act, 1958 and may, in the future become the owner, licensee and/or authorized distributor for other trademarks, including logos and designs, related or unrelated to Franchisor's Marks (referred to in this Agreement as Franchisor's Marks"); and WHEREAS, Franchisor has developed and continues to develop a system for merchandising “X Y Z” authorized products, which system includes distinctive signs, uniforms, various trade secrets and other confidential information, and in some cases also includes architectural designs, equipment specifications, layout plans, inventory, record‐keeping and marketing techniques (the "System") which are materially reflected in Franchisor's Operations Manual and other manuals disseminated by the Franchisor (collectively, the "Manuals"). Franchisor identifies the System by Franchisor's Marks, and such other Trademarks, service marks, trade names, logos and designs as may be designated by Franchisor in writing as being authorized for use in the System. Franchisor's Marks identify for the public the source of the services rendered in accordance with the standards and specifications established by Franchisor; andWHEREAS, the System as used in existing and future Stores and Distribution Points have established or will establish a reputation for quality, cleanliness, appearance and service, and through such operations and continued marketing and advertising efforts, have created demand and goodwill for the authorized “X Y Z” products sold as a result of which the System has acquired valuable goodwill and a favourable reputation; and
WHEREAS, Franchisee desires to enjoy the benefits of (i) operating under the System and using Franchisor's Marks, and (ii) being authorized to operate one Store operation as set forth below within the System in strict accordance with the standards and specifications established by Franchisor; and
WHEREAS, Franchisor is willing to grant Franchisee a license under Franchisor's Marks and the System, subject to Franchisee's strict compliance with the terms and conditions of this Agreement;
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1. FRANCHISE RIGHT GRANTED, LOCATION.
GRANT.
In consideration of the issuance of the franchise granted herein, Franchisee shall pay to Franchisor the non‐refundable sum of Rs ____________/- (the "Initial Fee ) plus service tax. In exchange, Franchisor hereby awards Franchisee the right to open and operate, under the terms of this Agreement, one Store operation specializing in Computer repair, sale/hire of new/used Computer, sale of Computer accessories & components and such other products as specified by Franchisor in Franchisor's Operations Manual, or subsequently added in accordance with Operations Manual amendments, under the name "“X Y Z”" at a location to be mutually agreed upon by both parties. No exclusive or protected market is granted by this Article. The store should be made operational within a period of 3 months from the date of signing of the franchise agreement or payment of the Franchise fees, whichever is earlier. The Initial Fee shall be deemed fully earned by Franchisor upon the execution of this Agreement by Franchisor and Franchisee and shall not be refunded, in whole or in part, upon any termination of this Agreement, or at any other time or under any other circumstances.
1.1    LICENSE.
Franchisor hereby grants and awards to Franchisee, for the term set forth in this Agreement, and any renewal term, beginning on the date of this Agreement, the right and license, and Franchisee hereby undertakes the obligation, to operate the business described in this Agreement under Franchisor's Marks and such other of Franchisor's Marks as may be designated by Franchisor, to operate such business solely in accordance with the System, and only at the specific location to be agreed upon by Franchisor and Franchisee (the "Location").
1.2    LOCATION.
Franchisee is being granted the permission to open up a “X Y Z” Store in …………………... Franchisee shall engage in the business of operating a “X Y Z” Store operation including Computer repair activities at the Location only. Franchisee acknowledges its sole responsibility for finding the Location and that Franchisor is not obligated to directly or indirectly obtain an approved location for Franchisee. The Franchisor is not going to appoint another Franchise within …… kms radius of the existing “X Y Z” store owned by the franchisee in ……………. provided all the terms and conditions contained in this agreement are duly fulfilled.
ARTICLE 2. INSTALLATION AND COMMENCEMENT OF BUSINESS.
Franchisee, at its own expense, shall (i) renovate the Location into a Store operation; (ii) obtain all necessary governmental permits and licenses prior to beginning the renovation of its Location into a Store operation and Franchisee shall fully complete the renovation, construction and equipping within a reasonable time thereafter. Franchisee shall commence operation of each Store operation no later than thirty (30) days following substantial completion of the renovation and equipment installation at the Location, and shall give Franchisor ten (10) days written notice prior to commencing operations. In no event shall Franchisee construct or remodel the interior or exterior of any Store operation or make any improvements which vary from the then‐current standards, plans, and specifications approved by Franchisor, without first obtaining Franchisor's prior written approval. Franchisee, at its own expense, shall obtain all municipal and state licenses necessary to operate “X Y Z” store prior to commencing business at its Store operation and shall maintain all licenses in full force and effect during the term of this Agreement.
ARTICLE 3. TRAINING.
3.1 Franchisee will designate individuals (up to 2 persons) as trainee(s) to attend Franchisor's training at Franchisor’s H.O. in Kolkata or at another training location selected by Franchisor. Franchisor will offer initial training programs for Franchisor and its employees at times selected by Franchisor. The training fees paid by the franchisee to the franchisor shall include the overhead costs of training, materials, and all technical training tools. The franchisee shall bear the cost of travelling, lodging & fooding and all other expenses provided during the course of training by the franchisor to the franchisee. The training program and manner of conducting such program shall be at Franchisor's sole discretion and control. The training course will be structured to provide practical training in the implementation and operation of a “X Y Z” store carrying out Computer repair activities as described.
3.2 Franchisee will not allow any “X Y Z” Store to be opened or managed by any person who has not attended and successfully completed the management training course designated by Franchisor. If Franchisee is an individual, and does not manage its “X Y Z” Store on a day‐to‐day basis, and in the event its designated “X Y Z” Store manager resigns or is terminated, Franchisee must arrange to have the successor “X Y Z” Store manager (i) begin the required training course within thirty (30) days of first assuming the duties of a “X Y Z” Store manager and (ii) successfully complete the course after paying the necessary training charges as decided by the company from time to time. If franchisee successfully completes the training program, the required training course conducted at Franchisor's facilities will not extend beyond one (1) week. However, the course conducted at Franchisor's facilities, may require an additional 20 hours of operational training in a Franchisor approved “X Y Z” Store as a prerequisite.
3.3 If at any time the trainee voluntarily withdraws from, or is unable to complete its training, or fails to demonstrate an aptitude, spirit or ability to comprehend and carry out the course of study to the reasonable satisfaction of Franchisor, then Franchisor shall have the right to require Franchisor's trainee to attend other training class(es) or to perform additional operational training until Franchisor is reasonably satisfied that Franchisee's trainee has satisfactorily completed the training course after paying the training fees as required by the Franchisor. Franchisee may not open its “X Y Z” Store until training is completed to Franchisor's reasonable satisfaction.
3.4 In the event of a sale to a third party of Franchisor’s “X Y Z” Store after opening, the transferee must be trained in the “X Y Z” H.O. in Kolkata or any other location as per the discretion of the Franchisor as a condition of Franchisor's consent to such transfer. All tuition costs for such training shall be deemed paid upon receipt by Franchisor of five percent (5%) of the sales price of Franchisor's “X Y Z” store Operation due in accordance with Article 14 herein. In the event of an approved non‐sale management transfer to a third party of Franchisee’s “X Y Z” store, the transferee shall attend the Franchisor training at H.O. and pay to Franchisor the training fee, which fee shall not exceed Rs _________/-. No “X Y Z” Store shall open or re-open until the Franchisor certifies that the transferee is approved to operate the respective “X Y Z” store.
3.5 Additional training sessions are available at Franchisee's request and expense, and at Franchisor's request, at Franchisee's expense, except for the initial training course itself. Franchisee's attendance at additional training sessions is mandatory if they are scheduled in Franchisee's state. For this additional training, Franchisor will provide the instructors and instructional materials, but Franchisee must arrange for transportation, lodging and food for itself and/or its manager. The cost will depend on distance Franchisee must travel and the type of accommodation chosen. Additionally, Franchisee must attend regional meetings, when and if established by Franchisor, and must attend annual national conventions, when and if scheduled.
ARTICLE 4. MANUALS AND STANDARDS OF Franchisee QUALITY, CLEANLINESS AND SERVICE.
4.1 STANDARDS.
In order to promote the value and goodwill of Franchisor's Marks and the System and to protect Franchisor's Marks and the other “X Y Z” Marks and brand, Franchisee agrees to conduct its business in accordance with the standards promulgated by Franchisor as follows:
4.2 MANUALS.
4.2.1 In the Manuals and other publications, Franchisor will list authorized products to be sold by Franchisee, and promulgate standards of operation for “X Y Z” store Operations, including standards of quality, cleanliness, and service for all product line items, furnishings, interior and exterior decor,  supplies, fixtures, and equipment used in connection with each “X Y Z” store operation. Franchisee agrees to operate its “X Y Z” Store in accordance with the standards, specifications and procedures set forth in the Manuals, this Agreement and the sublease for the Location. Franchisee further agrees that changes in the menu, or the standards, specifications and procedures may become necessary from time to time and agrees to accept as reasonable all modifications, revisions and additions to the Manuals as authorized by Franchisor. The sale of any product or service at the Franchisee’s Location, without Franchisor's prior written approval shall constitute a material violation of this Agreement.
4.2.2 The Manuals and all amendments to the Manuals (and copies thereof) are copyrighted and remain Franchisor's property. They are loaned to Franchisee for the term of the Agreement, and must be returned to Franchisor upon the Agreement's termination, expiration or non renewal. The Manuals are highly confidential documents which contain certain trade secrets of Franchisor, and Franchisee shall never reveal, and shall take all reasonable precautions, both during and after the term of this Agreement, to assure that its employees or any other party under Franchisee's control, shall never reveal any of the contents of the Manuals or any other publication, recipe or secret provided by Franchisor, except as is necessary for the operation of Franchisee's Store Operation.
4.3 HOURS.
Franchisor and Franchisee agree that the hours of operation of Franchisee’s Store operation are at a minimum, 10:00 am. to 07:00 p.m. (evening), six days per week, and Franchisee agrees to operate its Store operation during such hours. If the Location is in a mall or shopping centre, the hours of the mall or shopping centre shall control. Franchisee shall diligently and efficiently exercise its best efforts to achieve the maximum gross sales possible from its location, and will be open for business not less than 9 hours per day, six days per week, unless additional opening hours are reasonably required to maximize operations and sales. If such hours are incorrect in relation to the sales potential of Franchisee’s Store Operation, then Franchisor and Franchisee shall reasonably adjust such hours by jointly establishing new hours of operation. It is acknowledged that the hours of other Franchisees will vary in relation to each respective location, and local legal restrictions, if any.
4.4 APPEARANCE.
From time to time, Franchisee's Store Operation may need a cosmetic improvement or equipment change or addition in order to comply with the Manuals and/or to maintain proper operations and an aesthetic appearance and a professional image. Accordingly, Franchisor may require remodeling and renovation, and modifications to existing equipment and improvements as is reasonably necessary. Franchisor shall not require any such work at a particular Store Operation less than two (2) years after the opening of the Store operation except: (i) for additional machineries, equipment, tools, and accessories if authorized product line preparation methods or products are developed and authorized by Franchisor; (ii) if repairs or repainting are necessary to maintain the appearance of the interior and exterior of the Location in a clean and orderly condition satisfactory to Franchisor; or (iii) upon the sale of the Franchisee's Store Operation. Within forty five (45) days after receipt of written notice, Franchisee shall fully implement and complete such changes to its Store Operation operating under this Agreement. The cost of additional or new introductions of machineries, equipment, tools, accessories, raw materials, packaging materials or any other material, any renovation work if required, has to be borne by the Franchisee.
4.5 PRODUCT LINE AND SERVICE.
Franchisee agrees to carry out Computer repair services from the “X Y Z” store as per the terms specified by Franchisor in this Agreement or in the Manuals and to follow all specifications and formulas of Franchisor as to specifications, contents, weight and quality of products offered & delivered to its customers from Franchisor's Store Operation. Franchisee is allowed to sell other IT products or to carry out any other activity from the store. The Franchisor may not allow any other activity or any such activity except for Computer repair from the “X Y Z” store, if any activity is deemed to hamper or tarnish the brand value of the “X Y Z” store in any manner whatsoever as per the sole discretion of the Franchisor.
4.6 BOXES, STICKERS AND OTHER PACKAGING Marketing Materials.
4.6.1 Franchisee agrees that all authorized product line items will be delivered to customers only after proper packaging bearing accurate reproductions of Franchisor's Marks as provided by the Franchisor or as approved by the Franchisor. All boxes, bags, Packets, Stickers and other packaging and like articles used in connection with Franchisor's Store Operation shall conform to Franchisor's specifications, shall be imprinted with Franchisor's Marks and shall be purchased from Franchisor directly or from a distributor or manufacturer approved in writing by Franchisor, as provided in Article 8, which approval will not be unreasonably withheld.
4.6.2 No item of merchandise, furnishings, interior and exterior décor items, supplies, marketing tools, fixtures or equipment bearing any of Franchisor's Marks shall be used in or upon any Store Operation unless the same shall have been first submitted to and approved in writing by Franchisor.
ARTICLE 5. Catalogue, Leaflets, Paper Advertisement, etc, all other marketing tools and materials,
Stationery, UNIFORMS, INSPECTIONS, SIGNS.
5.1 Catalogues/leaflets/Price Lists.
5.1.1 All products approved by the Franchisor shall be distributed under the specific name designated by Franchisor from time to time. Franchisor shall establish all product prices for the products approved and branded by the Franchisor as per its sole discretion. No standard product or service as approved by the Franchisor will be removed from the list of products and services offered from the store unless Franchisee is so instructed by Franchisor.
5.1.2 Such "Authorized" and/or "Approved" Products shall be marketed by approved formats to be utilized in Franchisee's Store Operation. The approved and authorized format(s) may include, in Franchisor's discretion, requirements concerning organization, graphics, product descriptions, illustrations, and any other matters (except prices) related to the format, whether or not similar to those listed. In Franchisor's discretion, the format(s) may vary depending upon region, market size, and other factors. Franchisor may change the format(s) from time to time or region to region, in which case Franchisee will be given a reasonable time (not longer than thirty (30) days) to discontinue use of any old format(s) and implement use of the new format(s).
5.1.3 Franchisee shall cease selling any previously approved product within thirty (30) days after receipt of notice that the product is no longer approved.
5.1.4 The Authorized Products & services sold by Franchisee shall be of the highest quality, and the raw materials, composition, specifications  shall comply with the instructions and guidelines provided by Franchisor or contained in Franchisor's Operations Manual, and with the further requirements of Franchisor as they are communicated to Franchisee from time to time.
5.2 COMPLIANCE.
Franchisee shall operate its Store Operation as a clean, orderly, legal and respectable place of business in accordance with Franchisor's business standards and merchandising policies, and shall comply with all applicable ordinances, laws, statutes and regulations governing the operation of such premises, including all disability. Franchisee shall not allow any Location or part of a Location to be used for any immoral or illegal purpose.
5.3 SIGNS, DESIGNS AND FORMS OF PUBLICITY.
5.3.1 Franchisee shall maintain a suitable sign or awning at, on, or near the front of the Location, identifying the Location as a "“X Y Z” Store". Such sign shall confirm in all respects to Franchisor's requirements and in accordance with the layout and design plan approved for the Location, except to the extent prohibited by local legal restrictions.
5.3.2 No exterior or interior sign or any design, advertisement, internet address, "web page" or world wide web home page, sign, or form of publicity, including form, colour, number, location, and size, shall be used by Franchisee or any Association (as defined below) unless first submitted to Franchisor and approved in writing (except with respect to prices). Any request by Franchisee for such approval shall be properly submitted in duplicate to Franchisor. Franchisor shall respond to such request within thirty (30) days of its receipt. Whenever Franchisee elects to utilize, in the form supplied, advertising supplied by Franchisor or any promotional item specifically approved by Franchisor, no further approval for use of such material is required. Upon written notice from Franchisor, Franchisee shall discontinue and/or remove any objectionable advertising materials or any other materials not suitable for display, in Franchisor's sole discretion.
5.4 UNIFORMS AND EMPLOYEE APPEARANCE.
Franchisee shall cause all employees, while working in Store Operation, to: (i) wear uniforms of such colour, design, and other specifications as Franchisor may designate from time to time, and (ii) present a neat and clean appearance. If the type of uniform utilized by Franchisee is removed from the list of approved uniforms, Franchisee shall have thirty (30) days from receipt of written notice of such removal to discontinue use of its existing inventory of uniforms and implement the approved type of uniform.
5.5 MACHINES OR OTHER MECHANICAL DEVICES.
Franchisee shall not permit machines or any other mechanical device to be installed or maintained in its Location which can be used to the detriment of or in competition with the business of the franchisor without Franchisor's prior written approval.
5.6 INSPECTION.
5.6.1 Franchisor's authorized representatives shall have the right to enter the Franchisee’s entire Store area during business hours, without disrupting Franchisee's business operations, for the purposes of examining the same, conferring with Franchisee's employees, inspecting and checking operations, furnishings, interior and exterior decor, supplies, fixtures, and equipment, and determining whether the business is being conducted in accordance with this Agreement, the System and the Manuals.
5.6.2 In the event any such inspection indicates any deficiency or unsatisfactory condition with respect to any matter required under this Agreement or the Manuals, including but not limited to quality, cleanliness, service, health and authorized product line, it may be treated as violation of the terms and conditions of the Agreement. The Franchisor may notify Franchisee in writing of Franchisee's noncompliance with the Manuals, the System, or this Agreement. Franchisee shall have three (3) days after receipt of such notice, or such other greater time period as Franchisor in its sole discretion may provide, to correct or repair such deficiency or unsatisfactory condition, if it can be corrected or repaired within such period of time. If not, Franchisee shall within such time period commence such correction or repair and thereafter diligently pursue it to completion.
ARTICLE 6. ADVERTISING.
All local level advertising & marketing activities will be done by the franchisee at his own expense and the Franchisor is not, under any circumstances, obligated to contribute to any national or local advertising fund, program or other organization, any advertising fees or contribution. For any national advertising and branding campaign franchisees will contribute upon mutual consent depending on case to case basis.

 

ARTICLE 7. COMPANY MARKS AND ADDITIONAL MARKS.

7.1 The license and related rights to use the System, the Manuals, Franchisor's Marks and any other proprietary products granted by this Agreement are applicable only with respect to Franchisee's Store Operation at the Location, and not elsewhere, except in the event of a relocation approved in writing by Franchisor. This Agreement does not authorize the use of mobile vending vehicles, carts, kiosks or any other non‐traditional delivery systems without prior approval from the company, any such use will be treated as violation of the terms and conditions mentioned in this agreement.

7.2 Except within the ……… kms radius of the Franchisee store, which is the exclusive Territory of the Franchisee under this Agreement, the Franchisee shall not interfere in any manner with, or attempt to prohibit, the use of Franchisor's Marks and/or the System by any other Franchisee of Franchisor or any other distribution points or any other system used to distribute “X Y Z” authorized or branded products. Provided that in terms of this Agreement and as long as this Agreement is in force, the Franchisor shall not appoint any other Franchisee within a radius of ………. Kms from the Franchisee store.

 

7.3 Franchisor may, from time to time, in Franchisor's sole discretion, obtain additional trademark and/or service mark rights in words and/or designs. In the event of any of these occurrences, Franchisor may license Franchisee to use those trademarks or service marks by giving written notification to Franchisee that such marks now form part of Franchisor's Marks. The term of such license will be coextensive with the term of this Agreement or as otherwise established by Franchisor, and will be subject to all restrictions with respect to the use of those rights as set forth in this Agreement and in the notice granting Franchisee the license.

7.4 Franchisor is not obligated by this Agreement or otherwise, to protect Franchisee's right to use the trademarks, service marks, etc., or to protect Franchisee against claims of infringement or unfair competition of the Trademarks/service marks.

ARTICLE 8. DISTRIBUTION, MANUFACTURE, AND PURCHASE OF EQUIPMENT, SUPPLIES, AND OTHER PRODUCTS.

 

Franchisee agrees to use only Franchisor's supplied or approved raw materials, components & process while repairing Computers. Franchisee further agrees to buy Raw Materials & Components required for repairing a Computer from Franchisor only or as defined below, manufactured in accordance with Franchisor's specifications from approved manufacturers, distributed by approved distributors, and sold to Franchisee as follows:

8.1 DEFINITIONS.

8.1.1 For the purpose of this Agreement, "distributor" is defined as any entity, except a manufacturer, that directly or indirectly delivers raw materials to the Franchisee. A "manufacturer" is defined as the entity that manufactures and/or sells the Raw Materials to a distributor. Raw Materials means all of the products purchased from Franchisor or distributors, and/or manufactured or sold by manufacturers or production entities which are used in the creation of Authorized Products. Raw Materials, Components & Spares  include, but are not limited to Computer LCD screen, Computer adapter, Computer battery, Computer keypad, Computer mother board, Computer mother board components & chips, Computer hinges, Computer inverters, Computer mouse pad, etc. "Authorized" means approved by Franchisor in accordance with the procedures established in this Agreement.

8.2 DISTRIBUTORS.

8.2.1 Franchisee acknowledges that it is generally unrealistic from a cost and service basis to have more than one distributor in the market area of Franchisee Store operation, and that to obtain the lowest distribution costs, all regional Franchisees should only purchase from one authorized “X Y Z” distributor. Franchisee agrees to purchase all equipment, supplies, Raw Materials and other products and materials necessary for any Computer repair activity, only from the Franchisor himself or Authorized distributors, and other authorized sources who demonstrate, to the continuing reasonable satisfaction of Franchisor, the ability to meet Franchisor's then‐current standards and specifications for such items; who possess adequate quality controls and capacity to supply Franchisee and all other Franchisee needs promptly and reliably; who demonstrate the ability and willingness to work with Franchisor to provide the assistance needed by the those Franchisees in the region and all other Franchisees; who agree to distribute all authorized “X Y Z” products; who comply with Franchisor's reasonable requirements; and who have been approved in writing by Franchisor and not thereafter disapproved.

8.2.2 If Franchisee desires to purchase any items from an unapproved distributor, whom Franchisee desires to become an Authorized distributor, Franchisee shall first submit a written request, in duplicate, for such approval to Franchisor, accompanied by a similar written request for approval from the proposed distributor. Franchisor shall have the right to require that the proposed distributor provide reasonable financial, operational and economic information regarding its business and that Franchisor's representatives be permitted to inspect the proposed distributor's facilities and establish economic terms, delivery, service and other requirements consistent with other distribution relationships for other Store operations. The proposed distributor shall pay to Franchisor in advance all of Franchisor's reasonable costs in review of the application of the distributor to service the Franchisee as well as all current and future reasonable costs related to inspecting and re‐inspecting the distributor's facilities, equipment, Raw Materials in the distributor's possession at any time. Franchisor may revoke its approval upon the distributor's failure to continue to meet any of Franchisor's criteria.

Nothing in this article shall require Franchisor to approve any distributor. Upon the receipt by Franchisor of Franchisee and the proposed distributor's request for approval in full compliance of this article, Franchisor will notify Franchisee of its decision within 60 days after receipt thereof. In the event an alternate approved distributor to the recommended distributor is used by Franchisee, as a condition thereof Franchisee and all other Franchisees shall authorize the alternate distributor to provide to Franchisor duplicate purchase invoices for Franchisor's records and inspection purposes and to otherwise comply with Franchisor's reasonable requests.

8.3 MANUFACTURERS.

8.3.1 The parties agree that Franchisor's product specifications and quality control system are highly confidential information and are trade secrets of Franchisor. In order to (i) achieve appropriate pricing, (ii) obtain “X Y Z” authorized Raw Materials for Franchisee, and (iii) establish consistent uniformity of “X Y Z” products, Franchisee acknowledges that purchasing by all Stores or regional Franchisees from the Franchisor himself or approved manufacturers for raw material, components & spares required for Computer repair, is a necessity. Because of the importance of quality and uniformity of product & service and the significance of product specifications and quality control in the preparation of Authorized Products & service to achieve and maintain such quality and uniformity, it is to the mutual benefit of the parties that Franchisor closely control the production and distribution of the Raw Materials, Components & spares used to repair any Computer by Franchisee. Similar considerations may also apply to other products which Franchisor may develop or introduce in the future. Franchisee therefore agrees to purchase only Raw Materials, Components and spares required for Computer repair directly from Franchisor himself or manufactured in accordance with Franchisor's specifications and quality standards by approved manufacturers who demonstrate, to the continuing reasonable satisfaction of Franchisor, the ability to meet Franchisor's then‐current standards and specifications for such items; who possess adequate quality controls and capacity to meet the needs of Franchisees and all other Franchisee stores or distributor in a given region or territory promptly and reliably; who demonstrate the ability and willingness to work with Franchisor and to provide the assistance needed by the “X Y Z” system and who have been approved in writing by Franchisor and not thereafter disapproved.

8.3.2 If Franchisee desires to purchase any items from an unapproved manufacturer, who Franchisee desires to become an Authorized manufacturer, Franchisee (i) shall first submit a written request, in duplicate, for such approval to Franchisor accompanied by a similar written request for approval from the proposed manufacturer. Franchisor shall have the right to require that the proposed manufacturer provide reasonable financial, operational and economic information regarding its business and that Franchisor's representatives be permitted to inspect the proposed distributor's facilities and establish economic terms, delivery, service and other requirements consistent with other with other manufacturing relationships for other Franchisee stores. The proposed manufacturer shall pay to Franchisor in advance all of Franchisor's reasonable costs in review of the application of the manufacturer to service the Franchisee as well as all current and future reasonable costs related to inspecting and re‐inspecting the manufacturer's facilities, equipment and Raw Materials at any time. Franchisor may revoke its approval upon the manufacturer's failure to continue to meet any of Franchisor's criteria. Nothing in this article shall require Franchisor to approve any manufacturer. Upon the receipt by Franchisor of Franchisee and the proposed manufacturer's request for approval in full compliance of this article and the completion of all of the inspections needed by Franchisor to evaluate the manufacturer, Franchisor will notify Franchisee of its decision within 60 days after completion of such application and inspections. If an alternate approved manufacturer to the recommended manufacturer is used by Franchisee, as a condition thereof Franchisee and all other Franchisees shall authorize the alternate manufacturer to provide to Franchisor duplicate purchase invoices for Franchisor's records and inspection purposes and to otherwise comply with Franchisor's reasonable requests.

8.4 PURCHASE OBLIGATIONS.

Franchisee agrees to purchase the following items from the Franchisor himself or from approved distributor and manufacturer designated by Franchisor:

8.4.1 All Computer components, raw materials & spares that is required for repair/replacement in a Computer including LCD Screen, keyboards, mother board, inverter, hinges, jacks & other components and spares. Franchisor reserves the right to authorize exceptions as circumstances warrant.

8.4.2 All Branded “X Y Z” Products that bear Franchisor's Mark; Franchisor has a long term strategic plan to create another profit centre for Franchisee and itself by the sale of “X Y Z” branded products in Stores, shopping malls, cineplexes, grocery stores, etc. To accomplish this goal, Franchisor intends to develop such products. To effectuate this long term strategy, Franchisee agrees to cooperate with Franchisor with respect to the purchase, display and sale of any Branded Products authorized for sale by Franchisor. Franchisee consents to the receipt by Franchisor of licensing fees from manufacturers who manufacture Branded Products which will compensate Franchisor for such use of Franchisor's Marks.

8.4.3 Certain “X Y Z” standard exterior and interior signs; these signs require the prior fabrication of sign moulds or advance production in quantity to be either affordable or promptly available. If Franchisor has entered into an agreement with approved sign manufacturer(s), granting rights to use Franchisor's Marks in connection with the signs and to sell such signs to “X Y Z” Franchisees, Franchisee agrees to purchase its signs from the authorized sign manufacturer(s).

8.4.4 Franchisee agrees that at such times that Franchisor establishes a regional or national purchasing program for any of the Raw Materials, which may benefit Franchisee by reduced price, lower labour costs, production of improved Authorized Product(s), increased reliability in supply, improved distribution, Raw Material cost control (establishment of consistent pricing for reasonable periods to avoid market fluctuations), improved operations by Franchisee or other tangible benefits to Franchisee, Franchisee will participate in such purchasing program in accordance with the terms of such program.

ARTICLE 9. CONTINUING FRANCHISE FEES, REPORTS, BOOKS AND RECORDS.

9.1 CONTINUING FRANCHISE FEES.

9.1.1 Franchisee shall pay to Franchisor monthly during the term of this Agreement and any renewals or extensions thereof, a 16% royalty on the service charges raised on the total number of Computers repaired by the franchisee during a month. If only inspection charges are taken by the franchisee and no repair work has been done, there will be no royalty charged by the franchisor from the franchisee. For the purposes of this Agreement, "Computer repair," means both hardware and software repair done by the “X Y Z” Store whether in cash or for credit (and, if for credit, whether or not payment is received therefore), for all Computers repaired in or from each of Franchisee’s Store, excluding sales taxes and/or any other taxes applicable.

9.1.2 At Franchisor's request, Franchisee shall promptly execute or re‐execute within five (5) days after Franchisor's request, and deliver to Franchisor appropriate pre‐authorized check forms or such other instruments or drafts required by Franchisor's bank, payable against Franchisee's bank account, to enable Franchisor to electronically (draft on Franchisee's account by electronic withdrawal), collect the franchise fees under the terms of this Agreement. At Franchisor's request, Franchisee shall within 5 days from such request promptly perform such acts as to enable Franchisor or its designee to connect its computers to Franchisee's computer(s) or Franchisee's POS System, so that Franchisor or its designee may electronically obtain statistical information regarding Franchisee's business activities that Franchisor may in its sole discretion request. Franchisee agrees to not disconnect Franchisor or its designee from such connection or phone line at any time, for any reason, without Franchisor's prior written approval. Franchisee specifically authorizes Franchisor to either "upload" or "download" information in and from or to its computers, cash registers or other such devices as allowed by law, as it relates to the Store Operation by internet, intranet, and other networks or other means as it becomes available.

9.1.3 Franchisee shall report its gross sales by telephone within three (3) days after the end of each month or at such other times as are established by Franchisor in its sole discretion. Franchisee shall submit written weekly summaries showing results of its operations by the following Saturday. If Franchisee fails to report its sales on a timely basis, Franchisor may estimate the amount of Franchisee's sales. Franchisor will then deposit or transfer the reported, or in the absence of a report, the estimated, amounts due into its own account, using the Store Franchisee's pre‐authorized checks or other instruments. If any draft, electronic or otherwise, is unpaid because of insufficient funds or otherwise, then Franchisee shall pay Franchisor's expenses arising from such non‐payment, including bank fees in the amount of at least Rs 500/‐, hourly staff charges arising from such default, and any other related expenses incurred by Franchisor. By the 5th day of each month Franchisee shall pay to Franchisor any sums unpaid for the prior month to adjust for sales owed for any partial week or sales that were unpaid, improperly recorded or not credited on Franchisees books and records.

Franchisee hereby agrees to pay any sales, use or other tax now or hereinafter imposed on franchise fees, advertising fees or any additional rental collected under the sublease for the Location, imposed by any Federal, state or local governmental authorities. Franchisor, at its sole discretion, may collect the taxes in the same manner as franchise fees are collected herein and if Franchisor collects such taxes, Franchisor shall promptly pay the tax collections to the appropriate governmental authority.

9.2 REPORTS AND INSPECTION OF RECORDS.

9.2.1 Franchisee shall submit to Franchisor a quarterly Profit and Loss Statement, signed and certified by Franchisee. The Profit and Loss Statement shall be prepared in accordance with generally accepted accounting principles, and shall provide Franchisee's sales, expenses and financial status with respect to Franchisee's Store Operation. Franchisor reserves the right to require such further information concerning Franchisee's Store Operation as Franchisor may from time to time reasonably request.

9.2.2 Upon 10 days prior written notice, Franchisor, its agents or representatives may audit Franchisee's books and records in accordance with generally accepted standards established by certified public accountants. In connection with such audit(s) or other operational visits, Franchisee agrees to keep its cash receipts records, weekly and monthly control forms, accounts payable records including all payments to Franchisee's suppliers in its Store Operation or at its business office for three (3) years after their due date, which records shall be available for examination by Franchisor or its representative(s), at Franchisor's request. Without any prior written notice, Franchisor, its agents or representatives may inspect Franchisee's entire Store Operation and Franchisee's daily, weekly and monthly statistical information or any other information which is required under the Operational Manual. Franchisee shall make such Information available for such inspections in recognition that an operational inspection cannot succeed without review of essential statistical information.

9.2.3 If any audit or other investigation reveals an under‐reporting or under‐recording error of five (5%) percent or more, then in addition to any other sums due, the expenses of the audit/inspection shall be borne and paid by Franchisee billing by Franchisor, plus interest at the highest compound rate authorized by the state in which the Store Operation is located, but not to exceed the rate of fifteen (15%) percent per annum.

9.2.4 Franchisee acknowledges that Franchisor's Operations Department regularly reviews ongoing operations at Store operation to ensure consistency of products and service and compliance with the Manuals and this Agreement. Franchisee therefore agrees to promptly complete and submit all forms requested by Franchisor's Operations Department, whether on a daily, weekly or monthly basis. Noncompliance with this obligation constitutes a material violation of this Agreement.

ARTICLE 10. COVENANT REGARDING OTHER BUSINESS INTERESTS.

10.1 For purposes of this Article only, "Franchisee" shall mean and include the individual Franchisee; Franchisee's spouse and children; Franchisee's shareholders, officers, and directors, if Franchisee is a company; and any one or more partners or participants in Franchisee, if Franchisee is a partnership or joint venture.

10.2 Franchisee acknowledges that the “X Y Z”. System is unique and distinctive and has been developed by Franchisor at great effort, time, and expense, and that Franchisee has regular and continuing access to valuable and confidential information, training, and trade secrets regarding the “X Y Z” business. Franchisee recognizes its obligations to keep confidential such information as set forth herein. Franchisee therefore agrees as follows:

10.2.1 During the term of this Agreement, except with Franchisor's prior written consent, Franchisee shall not, in any capacity whatsoever, either directly or indirectly, individually or as a member of any business organization, engage in the business of Computer repair and Computer parts and components or any other item authorized by Franchisor, now or in the future approved by Franchisor for use in Franchisee’s Store Operation, or have any employment or interest in any firm engaged in the production or sale of such products.

10.2.2 Upon the termination, expiration or nonrenewal of this Agreement, or if Franchisee assigns or transfers its interest herein to any person or business entity, or if any person identified in the first paragraph of this Article terminates its relationship with Franchisee, then for a period of three (3) months thereafter such Franchisee shall not, in any capacity whatsoever, either directly or indirectly, individually or as a member of any business organization, engage in the production or sale at retail of any “X Y Z”. type product, or have any employment or interest in any firm engaged in the production or sale at retail or wholesale of any such products, at a site within a radius of five (5) kms of any of Franchisee's former Store Operation or within five (5) kms of any other Store Operation or Distribution Point then existing, unless Franchisor gives its prior written consent. If Franchisee violates the terms of this paragraph, Franchisee shall pay to Franchisor, as liquidated damages, an amount equal to Rs 50,000/‐ per month for each month this covenant is violated, plus 8% percent of the gross sales achieved at the site during the continuation of such violation.

10.2.3 In the event any portion of the above covenants violates laws affecting Franchisee, or is held invalid or unenforceable in a final judgment to which Franchisor and Franchisee are parties, then the maximum legally allowable restriction permitted by law shall control and bind Franchisee. Franchisor may at any time unilaterally reduce the scope of any part of the above covenants, and Franchisee shall comply with any such reduced covenant upon receipt of written notice.

10.3 The provisions of this Article shall not limit, restrain or otherwise affect any right or cause of action which may accrue to Franchisor for any infringement of, violation of, or interference with, this Agreement, or Franchisor's Marks, System, trade secrets, or any other proprietary aspects of Franchisor's business.

ARTICLE 11. INTERFERENCE WITH EMPLOYMENT RELATIONS.

Without Franchisor's prior written consent, during the term of this Agreement, Franchisee shall not employ or seek to employ, directly or indirectly, any person serving in an executive, managerial or operational position who is at the time or was at any time during the prior six (6) months employed by Franchisor or any of its subsidiaries. Request for Franchisor's consent shall be sent in duplicate and addressed in writing to Franchisor.

ARTICLE 12. SUBFRANCHISORS, SALESMEN.

In as much as this Agreement has not been executed by the Franchisee at the office of Franchisor, Franchisor requires certain assurances that this Agreement has been executed in accordance with applicable laws, rules and regulations. Accordingly, in order to induce Franchisor to execute this Agreement, Franchisee agrees to execute this Agreement that acknowledges that Franchisor is relying upon the acknowledgments, representations and commitments of Franchisee that no other salesman, staff member, entity, or associate of Franchisor has met Franchisee regarding this franchise sale or the offer and acceptance thereof other than those set forth therein. The Franchisee shall identify all sales persons involved in the sales, negotiation and execution of this Agreement and shall identify the sub‐franchisor. Franchisor shall be entitled to rely on the acknowledgements, representations and commitments of the Franchisee and the Franchisor shall be bound by its contents.

ARTICLE 13. LOCAL MARKETING MANUAL.

Franchisee acknowledges that Franchisor's local marketing manual and other marketing and advertising materials emphasize the implementation of marketing efforts within …. kms radius from the franchisee store. Such references, suggestions and emphasis directly grant to Franchisee a protected market or other exclusive right within such marketing area, and the Franchisee should restrict his marketing activities in the area within …….. kms radius from the franchisee store.

ARTICLE 14. NATURE OF INTEREST AND TRANSFER.

14.1 GENERAL PROVISIONS.

14.1.1 This Agreement shall inure to the benefit of the successors and assigns of Franchisor. Franchisor shall have the right to transfer or assign this Agreement to any person or legal entity who assumes its terms and agrees to comply with Franchisor's obligations contained herein. Franchisor shall have no liability for the performance of any obligations contained in this Agreement after the effective date of such transfer or assignment.

14.1.2 The rights and duties created by this Agreement are personal to Franchisee. Accordingly, except as otherwise permitted herein, neither Franchisee nor any person with an interest in Franchisee shall, without Franchisor's prior written consent, directly or indirectly sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any direct or indirect interest in this Agreement or, if Franchisee is a partnership, joint venture, or company, any direct or indirect interest in Franchisee. Any such purported assignment occurring by operation of law or otherwise without Franchisor's prior written consent shall constitute a default of this Agreement by Franchisee, and shall be null and void. Except in the instance of Franchisee advertising to sell its Store Operation pursuant to the terms hereof, Franchisee shall not, without Franchisor's prior written consent, offer for sale or transfer at public or private auction or advertise publicly for sale or transfer, the furnishings, interior and exterior decor items, supplies, fixtures, equipment, Franchisee's sublease or the real or personal property used in connection with Franchisee's Store Operation.

14.2 CONSENT TO TRANSFER.

For all proposed transfers or assignments of this Agreement, and transfers of more than 51% of the outstanding and issued stock of Franchisee by one or more transfers or any transfer which, directly or indirectly, effectively changes management control of Franchisee, Franchisor will not unreasonably withhold its consent to any transfer or assignment which is subject to the restrictions of this Article, provided however, Franchisor shall not be required to give its consent unless all of the following conditions are met prior to the effective date of assignment:

14.2.1 Upon the execution of this Agreement and upon each direct or indirect transfer of an interest in this Agreement or in Franchisee and at any other time upon Franchisor's request, Franchisee shall, within five (5) days prior to such transfer or at any other time at Franchisor's request, furnish Franchisor with an estoppels agreement indicating any and all causes of action, if any, that Franchisee may have against Franchisor or if none exist and a list of all shareholders or partners having an interest in this Agreement or in Franchisee, the percentage interest of each shareholder or partner, and a list of all officers and directors, in such form as Franchisor may require.

14.2.2 Franchisee's written request for transfer of either a partial or whole interest in this Agreement or Franchisee's Store Operation must be accompanied by an offer to Franchisor of a right of first refusal at the same price offered by any bona fide buyer less five (5%) percent Franchisor shall have the right and option, exercisable within fifteen (15) days after receipt of such written notification, to send written notice to Franchisee or such person that Franchisor or its third‐party designee, intends to purchase the interest which is proposed to be transferred, on the same terms and conditions offered by the third party. If Franchisor accepts such offer, the five (5%) percent transfer/administrative fee due by Franchisee in accordance with Article 3 shall be waived by Franchisor. Any material change in the terms of an offer prior to closing shall cause it to be deemed a new offer, subject to the same right of first refusal by Franchisor, or its third‐party designee, as in the case of the initial offer. Franchisor's failure to exercise such option shall not constitute a waiver of any other provision of this Agreement, including any of the requirements of this Article with respect to the proposed transfer.

14.2.3 The Franchisee is not in default under the terms of this Agreement, the Manuals or any other obligations owed Franchisor, and all of its then‐due monetary obligations to Franchisor have been paid in full.

14.2.4 The Franchisee and its shareholders or members, if the Franchisee is a company, have executed a general release under seal, in a form prescribed by Franchisor, of any and all claims against Franchisor, its affiliates, subsidiaries, shareholders, directors, officers, sub‐franchisors and employees.

14.2.5 The transferee/assignee has demonstrated to Franchisor's satisfaction that it meets all of Franchisor's then‐current requirements for new Franchisees or for holders of an interest in a franchise, including, without limitation, possession of good moral character and reputation, satisfactory credit ratings, acceptable business qualifications, and the ability to fully comply with the terms of this Agreement.

14.2.6 The transferee/assignee has assumed this Agreement by a written assumption agreement approved by Franchisor, or has agreed to do so at closing, and at closing executes an assumption agreement approved by Franchisor.

14.2.7 The transferee/assignee, its manager or other employees responsible for the operation of the Store Operation have satisfactorily completed Franchisor's training program.

14.2.8 The transferee/assignee executes such other documents as Franchisor may require, including a replacement franchise agreement on the then‐standard franchise agreement form used by Franchisor, in order to assume all of the obligations of this Agreement, to the same extent, and with the same effect, as previously assumed by the assignor.

14.2.9 At the completion of Franchisee's sale transaction, Franchisee shall pay to Franchisor an administrative/transfer fee of five percent (5%) of the gross selling price of Franchisee's Store Operation or in the event of a non sale management transfer, a fee of Rs 50,000/‐ to cover Franchisor's training expenses. This five percent (5%) administrative transfer fee will not be due with respect to any transfer that (together with all other related previous, simultaneous, or proposed transfers) does not result in the transfer of control of Franchisee.

14.2.10 Franchisee's rights may pass to Franchisee's next of kin or legatee if they assume Franchisee's obligations and attend and complete Franchisor's training program. Upon Franchisee's disability, Franchisee may sell the franchise or keep it, if operated by trained personnel. 14.2.11 Franchisor's consent to a transfer shall not constitute a waiver of any claims it may have against the transferring party arising out of this Agreement or otherwise.

14.2.12 If Franchisee is an individual, Franchisor hereby consents to the assignment of this Agreement and any and all obligations referable thereto without any fee charged by Franchisor to a corporation principally owned by Franchisee within ninety (90) days after the date hereof. Upon such assignment and assumption by the corporation along with delivery of executed originals of same to Franchisor, the individual Franchisee shall be released from any and all personal liability.

ARTICLE 15. TERM, DEFAULT AND TERMINATION.

15.1 TERM.

15.1.1 Provided Franchisee is not in default of the terms and conditions contained in its Location sublease and this Agreement, this Agreement shall continue for a period of 5 ( Five) years or for any longer period coterminous with the term of the Location sublease.

15.1.2 Franchisee may renew the rights granted by this Agreement for four (4) additional terms of five (5) years each, subject to the following conditions:

15.1.2.1 Franchisee gives Franchisor written notice of Franchisee's election to renew not less than six (6) and not more than twenty‐four (24) months before the end of the then current term;

15.1.2.2 Franchisee is not in default of any provision of this Agreement or any amendments to this Agreement, the Location sublease, the Manuals or any monetary obligation owed to Franchisor or its affiliates; and

15.1.2.3 At Franchisor's request, Franchisee shall undertake and complete the reasonable renovation or modernization of its Store Operation.

15.1.2.4 Franchisee shall execute Franchisor's then‐current franchise agreement and related agreements.

15.2 DEFAULTS WITHOUT OPPORTUNITY TO CURE.

Franchisee shall be in default and Franchisor may, at its option, upon fifteen (15) days written notice to Franchisee, terminate this Agreement and all rights granted by it and the deposit money stands forfeited, without affording Franchisee any opportunity to cure the default, upon the occurrence of any of the following events:

15.2.1 Franchisee's knowingly or intentionally maintaining false books or records, or submitting any false report or payment to Franchisor;

15.2.2 Franchisee’s conduct of the Store operation licensed pursuant to this Agreement is so contrary to this Agreement, the System and the Manuals as to constitute an imminent danger to the Franchisor and it’s brand(for example, selling spurious products or using inferior quality raw materials not authorized by the Franchisor continue despite Franchisee’s knowledge of such condition), or selling regularly unauthorized products to the public after notice of default and continuing to sell such products whether or not Franchisee has cured the default after one or more notices;

15.2.3 The conviction of a felony, or a crime involving moral turpitude, or any other crime or offence that is reasonably likely, in the sole reasonable opinion of Franchisor, to adversely affect the System, Franchisor's Marks; the goodwill associated with the System or Franchisor's interest in each of them by Franchisee’s, or its controlling or operating shareholders or members if Franchisee is a limited liability company, or Franchisee’s partners if Franchisee is a partnership, excluding non‐managing partners 15.2.4 Franchisee’s intentional disclosure or use of the contents of the Manual, trade secrets or confidential or proprietary information provided to Franchisee by Franchisor in violation of this Agreement, excluding acts of independent employees or others not under Franchisee’s control; or 15.2.5 If Franchisee repeatedly commits defaults under any provisions of this Agreement three (3) or more occasions in any twelve (12) month period, or sixteen (16) or more occasions in any consecutive twenty‐four (24) month period, even if Franchisee cured each such prior default, and even if Franchisee would otherwise be given an opportunity to cure the current default.

15.2.6 Franchisee’s, without Franchisor's consent, ceasing to operate or otherwise abandoning its Store operation or, upon destruction of its Store Operation, failure to rebuild and resume operation within a reasonable time. Cessation of the business shall not constitute a default under this Agreement if caused by expiration of a Location lease pursuant to its terms at execution, natural, governmental or supplier related causes out of Franchisee’s control, or when failure to rebuild following destruction of the Store Operation is prohibited by law or the Location lease. In the event of termination pursuant to this subsection 15.2.6, the written notice period shall commence five days from the date Franchisor sends written notice to Franchisee. At the expiration of this time period, this Agreement shall be deemed terminated. For purposes of this article, ceasing to operate or otherwise abandoning its Store operation shall be defined as Franchisee’s failure to open its Store Operation for business for 5 consecutive days.

15.3 DEFAULTS WITH OPPORTUNITY TO CURE.

15.3.1 Except as otherwise provided in this Agreement, Franchisee shall have ten (10) days after Franchisor's written notice of default within which to remedy any default under this Agreement, and to provide evidence of such remedy to Franchisor. If any such default is not cured within that time period, or

such longer time period as applicable law may require, Franchisor may, at its option, terminate this Agreement and all rights granted by it, by sending a five (5) day written notice of cancellation of this Agreement to Franchisee. Upon the expiration of such five (5) day period, this Agreement shall end and

expire as if it were the day fixed for termination of this Agreement.

15.3.2 Franchisee shall be in material default under this Article for any failure to comply with any of the requirements imposed by this agreement. Such material defaults shall include, without limitation, the occurrence of any of the following events:

15.3.2.1 Franchisee’s failure, refusal, or neglect to promptly pay any money owed to Franchisor, its subsidiaries or affiliates, when due, or to submit the financial or other information required by Franchisor under this Agreement.

15.3.2.2 Franchisee’s failure to maintain the standards specified by Franchisor in the Manual or otherwise.

15.3.2.3 Franchisee’s failure, refusal or neglect to obtain Franchisor's prior written approval or consent as required by this Agreement.

15.3.2.4 Franchisee’s misuse or unauthorized use of Franchisor's Marks or other material impairment of the goodwill associated therewith or Franchisor's rights therein.

15.3.2.5 Franchisee’s commencement or conducting of any business operation, or marketing of any product, under a name or mark which, in Franchisor's reasonable opinion, is confusingly similar to Franchisor's Marks.

15.3.2.6 Franchisee’s default, without cure after the applicable grace period, under any lease, sublease, sub‐sublease, mortgage, or deed of trust covering the Location.

15.3.2.7 Franchisee’s default in the performance of any term, condition or obligation in payment of any indebtedness to its landlord or sub‐landlord, distributors or suppliers or others arising out of the purchase of inventory, supplies or purchase or lease of equipment for operation of its Store operation, and if any such default is not cured within thirty (30) days after written notice by Franchisor to  Franchisee, unless Franchisee is determined by a court of competent jurisdiction to be not in default.

15.4 In the event of a default by Franchisee, all of Franchisor's costs and expenses arising from such default, including reasonable legal fees and reasonable hourly charges of Franchisor's administrative employees shall be paid to Franchisor by Franchisee within five (5) days after cure.

15.5 All disputes between Franchisor and Franchisee are subject to Kolkata Jurisdiction only.

15.6 Non‐enforcement by Franchisor of any violation of the terms of this Agreement by Franchisee shall not constitute a waiver of such violation by Franchisor nor shall Franchisor be deemed to have waived any of its rights to enforce compliance by Franchisee of such breach or any other breach of this Agreement.

ARTICLE 16. RIGHTS AND OBLIGATIONS UPON TERMINATION.

Upon the termination of Franchisee’s rights granted under this Agreement, (whether during the term of the Agreement or at its conclusion) the following apply:

16.1 Upon termination of this Agreement by lapse of time or by default, Franchisee’s right to use Franchisor's Marks, or any other mark distributed by Franchisor or insignia or slogan used in connection therewith, or any confusingly similar trademark, service mark, trade name or insignia shall cease. Franchisee shall immediately discontinue use of Franchisor's Marks, System, and colour scheme. Franchisee shall at its own cost, make cosmetic changes to Franchisee’s Store operation from Franchisor's proprietary designs including, but not limited to, the removal of all “X Y Z” identifying materials and distinctive “X Y Z”. finishes, tile walls, interior wall coverings and colours, exterior finishes and colours, signage and “X Y Z”. counter equipment (which shall be deemed proprietary to Franchisor) from the Location as Franchisor may reasonably direct.

16.2 Franchisor may retain all fees and deposits paid pursuant to this Agreement in case of termination of this agreement due to violation of any terms and conditions of this agreement or manuals.

16.3 Any and all obligations of Franchisor to Franchisee under this Agreement shall immediately cease and terminate.

16.4 Any and all rights of Franchisee under this Agreement shall immediately cease and terminate.

16.5 In no event shall a termination or expiration of this Agreement affect Franchisee’s obligations to take or abstain from taking any action in accordance with this Agreement. The provisions of this Agreement which constitute post‐termination covenants and agreements including the obligation of Franchisor and Franchisee to arbitrate any and all disputes shall survive the termination or expiration of this Agreement.

16.6 Franchisee acknowledges and agrees that rights in and to Franchisor's Marks and the use thereof shall be and remain the property of Franchisor.

16.7 If Franchisee has registered any of Franchisor's Marks or the name "“X Y Z”" as part of Franchisee’s

assumed, fictitious or corporate name, Franchisee shall promptly amend such registration to delete Franchisor's Marks there from.

16.8 Franchisee shall immediately pay any and all amounts owing to Franchisor, its subsidiaries and affiliates.

16.9 Franchisor shall have the option, exercisable by written notice within fifteen (15) days after the termination of this Agreement, to take an assignment of all telephone numbers (and associated listings) for Franchisee’s Store Operation. Franchisee is not entitled to any compensation from Franchisor, if Franchisor exercises this option.

ARTICLE 17. SOLE OBLIGATIONS OF FRANCHISOR.

17.1 Franchisor has obligated itself to provide specific services to Franchisee. Franchisor also provides other voluntary services at its sole discretion. Franchisor and franchisee agree that the following are the only required obligations of Franchisor:

17.1.1 To approve the Location of Franchisee.

17.1.2 To reasonably assist Franchisee with any operational problem encountered by Franchisee, after notice to Franchisor in duplicate, of Franchisee’s problem and the type of assistance needed. At no time shall reasonable assistance be interpreted to require Franchisor to pay any money to Franchisee. Franchisor, in its sole discretion, may provide any assistance at Franchisor's designated office or where Franchisee is located, at a time to be determined by Franchisor.

17.1.3 To reasonably administer to the advertising program. Franchisee acknowledges that pursuant to the advice of advertising and marketing professionals, advertising collections will at times be aggregated until sufficient revenues are accumulated to commence or complete an advertising or marketing program.

Reasonable administration shall be deemed to be good faith attempts to utilize the advertising funds in accordance with the advice and suggestions of the advertising and marketing staff or outside advertising and/or marketing companies, consultants or other entities retained for such purpose.

17.1.4 To supply to Franchisee a set of standard decor and layout plans and to thereafter approve the initial decor and layout of Franchisee’s Store Operation.

17.1.5 To loan Franchisee a copy of it’s any Manuals or CDs thereof containing mandatory and suggested specifications, standards and procedures. This Manual is confidential and remains Franchisor's property.

17.1.6 To train Franchisee in accordance with Article 3 herein, and to provide representatives of Franchisor to assist in opening the Store operation.

17.2 Franchisor shall not, and can not be held in breach of this Agreement until (i) Franchisor has received notice of any alleged breach from Franchisee in duplicate, by registered mail and (ii) Franchisor has failed to remedy the breach within a reasonable period of time after such notice, which period shall not be less than thirty (30) days. This is a material term of this Agreement and may not be modified or changed by any arbitrator in a arbitration proceeding or otherwise in any court of competent jurisdiction.

ARTICLE 18. POINT OF SALE SYSTEM, COLLECTION OF DATA.

18.1 This Agreement and the Manuals require the submission of weekly statistical control forms as well as other financial, operational and statistical information required by Franchisee and Franchisor to: (i) assist Franchisee in the operation of its Store operation in accordance with the System; (ii) allow Franchisor to monitor the Franchisee’s gross sales, purchases, costs and expenses; (iii) enable Franchisor to develop chain wide statistics which may improve bulk purchasing; (iv) assist Franchisor in the development of new authorized products or the removal of existing unsuccessful Authorized Products; (v) enable Franchisor to refine existing Authorized Products; (vi) generally improve chain wide understanding of the System; and (vii) obtain new types of information unknown at this time (collectively, the "Information"). To achieve these results, cash collection and data processing systems are necessary.

18.2 Franchisee agrees to purchase and use the point of sale cash collection and data processing system (the "POS System") and only the specified software authorized by Franchisor, as specified by Franchisor in writing. The POS System includes a PC based cash register, register tape printer, magnetic stripe reader, cash drawer, defined Franchisor polling and register software and telecommunications equipment.

18.3 Franchisee agrees to (i) connect the POS System to Franchisee’s telephone line(s); (ii) maintain it in good working order; and (iii) not disconnect any POS System connection or phone line at any time, for any reason, without prior written approval. Franchisee agrees, at Franchisor's request, to maintain membership in a designated third party network (such as CompuServe, AOL, Prodigy, etc.) for the purpose of implementing, transmitting, collecting and maintaining any Information or data exchange system. Franchisee specifically authorizes Franchisor to either "upload" or "download" information in and from or to its computers, cash registers or other such devices as allowed by law, as it relates to the Store operation by internet, intranet, and other networks or other means as it becomes available.

18.4 The 3rd party supplier of the POS system will provide 24‐hour telephone support and annual maintenance for any upgrades and enhancements that they make to the required POS System software. Franchisor may cancel this service on 30 days' written notice to Franchisee, and may resume these services at any time with any supplier Franchisor chooses. Franchisor may revise the POS specifications. Franchisee may be required to upgrade or update its POS System recording system. On Franchisor's request, Franchisee must apply for and maintain debit cards, credit cards or other non‐cash payment systems to enable customers to purchase products through these procedures. There is no contractual limitation on Franchisor's right to receive information through the POS System.

ARTICLE 19. RELATIONSHIP OF PARTIES, DISCLOSURE.

19.1 Franchisor and Franchisee are not and shall not be considered joint ventures, partners, or agents of each other, or anything other than Franchisor and Franchisee, and neither shall have the power to bind or obligate the other except specifically as set forth in this Agreement. Franchisor and Franchisee agree that the relationship created by this Agreement is not a fiduciary relationship. Franchisee shall not, under any circumstances, act or hold itself out as an agent or representative of Franchisor. Franchisee agrees to indemnify and hold Franchisor harmless from any claims, demands, liabilities, actions suits or proceedings asserted by third parties arising out of the operation of Franchisee’s Store operation or Franchisee’s breach of any of the terms of this Agreement. Franchisor agrees to indemnify and hold Franchisee harmless from any claims, demands, liabilities, actions, suits or proceedings asserted by third parties and arising out of Franchisor's operations unless caused by Franchisee.

19.2 As set forth delivered to Franchisee as described above, Franchisee acknowledges that Franchisor has entered into certain sub‐franchise agreements with sub‐franchisors and/or area developers in certain areas and territories. Pursuant to these contracts, the sub‐franchisors of Franchisor are obligated to provide certain sales, operational and support services for Franchisor. Franchisee acknowledges that the relationship between Franchisor and all of its sub‐franchisors and/or area developers is strictly contractual and that no sub‐franchisor and/or area developer is an agent of Franchisor. Accordingly, Franchisee acknowledges and agrees that any past, current or future sub‐franchisor is not the actual, express or implied agent of Franchisor, and has no power or authority to: (i) act on Franchisor's behalf; (ii) enter into or execute any agreement on Franchisor's behalf; (iii) make any representation or promise on Franchisor's behalf; or (iv) Bind Franchisor in any way. Unless otherwise specifically agreed to in writing, Franchisor expressly disavows any acts by others, including sub‐franchisors that purport to bind Franchisor in any way. Franchisee agrees to waive any claim or defence in any litigation or arbitration proceeding that a sub‐franchisor is the express or implied agent of Franchisor. Franchisee agrees that any attempt to raise, assert or justify such claim or defence in any proceeding constitutes a material default of this Agreement.

ARTICLE 20. DISPUTE RESOLUTION: ARBITRATION AND LEGAL PROCEEDINGS.

20.1 Franchisor and Franchisee acknowledge that disputes or disagreements may arise during the term of this Agreement and any renewals thereto. All disputes are subject to Kolkata Jurisdiction only.

20.4 Except as otherwise provided, each party shall bear its own attorney's fees, expert witness fees, and other court costs incurred in connection with any legal action or arbitration between Franchisor and Franchisee. In no event can the material provisions of this Agreement including, but not limited to the method of operation, Authorized Product line or monetary obligations specified in this Agreement, amendments to this Agreement or in the Manuals be modified or changed by the arbitrator at the arbitration hearing.

ARTICLE 21. EXECUTION, REQUESTS, CONSENTS AND WAIVERS.

21.1 This Agreement takes effect upon its acceptance and execution by Franchisee and Franchisor, and shall be governed by and construed in accordance with the laws of Kolkata, West Bengal, India. Franchisor will consider written requests by Franchisee for Franchisor's consent to a waiver of any obligation imposed by this Agreement. Franchisee agrees, however, that Franchisor is not required to act uniformly with respect to waivers, requests and consents as each request will be considered on a case by case basis, and nothing shall be construed to require Franchisor to grant any such request. Any waiver granted by Franchisor shall be without prejudice to any other rights Franchisor may have, will be subject to continuing review by Franchisor, and may be revoked, in Franchisor's sole discretion, at any time and for any reason, effective upon ten (10) days prior written notice to Franchisee. Franchisor makes no warranties or guarantees upon which Franchisee may rely, and assumes no liability or obligation to Franchisee by providing any waiver, approval, consent, assistance, or suggestion to Franchisee in connection with this Agreement, or by reason of any neglect, delay, or denial of any request.

21.2 Unless otherwise provided, whenever this Agreement requires Franchisee to obtain Franchisor's prior written consent, Franchisee shall timely address its written request for such consent in duplicate to the Franchisor or such other persons as Franchisor may designate in writing. Franchisor will then consider such request and advise Franchisee of the decision, in writing, within forty‐five (45) days. Franchisor's failure to advise Franchisee will constitute Franchisor's consent to such request. The forty‐five (45) day period shall not begin to run, however, until Franchisee has provided Franchisor with all information and documentation requested by Franchisor. Neither Franchisee nor Franchisor shall be deemed to have waived or impaired any right, power or option reserved by this Agreement, including, without limitation, its right to demand strict compliance with every term, condition, and covenant herein, or to declare any breach thereof a default and to terminate this Agreement prior to the expiration of its term, by virtue of any custom or practice of the parties at variance with the terms hereof; by any forbearance, delay, failure, or omission to exercise any right, power, or option, whether of the same, similar, or different nature, against Franchisor, Franchisee, or any other Franchisee; or by the acceptance of any payments due after any breach of this Agreement.

ARTICLE 22. MISCELLANEOUS PROVISIONS.

22.1 This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be deemed an original, such counterparts together shall constitute but one and the same instrument.

22.2 This Agreement contains the entire agreement of the parties and cannot be modified, changed or amended except in writing and signed by both the parties.

22.3 There is no other agreement, representation or warranty made by Franchisor or any other entity or person associated with Franchisor other than contained in this Agreement. This Agreement is not subject

to or conditioned upon the obtaining of a Location for Franchisee’s Store operation.

22.4 Except as otherwise provided, each party shall bear its own attorney's fees arising from the negotiations and execution or lack of execution of this Agreement, and any expert witness fees, and other court costs incurred in connection with any violation of this Agreement.

22.5 Each article, paragraph, subparagraph, term, and condition of this Agreement shall be considered severable. If for any reason, any portion of this Agreement is determined to be invalid or in conflict with any law or rule in a final ruling issued by any court, agency, or tribunal with valid jurisdiction in a proceeding to which Franchisor is a party, that ruling shall not effect the validity or enforceability of any other portion of this Agreement.

22.6 All notices to Franchisor required by the terms of this Agreement, unless otherwise provided, shall be sent by certified or registered mail or by overnight delivery service, addressed to the parties set forth in this Agreement, or at such other address as Franchisor designates. All notices to Franchisee required by the terms of this Agreement shall be sent by certified or registered mail or by overnight delivery service, addressed to Franchisee at the Location, or at such other or additional address as Franchisee designates in writing. If Franchisee refuses acceptance of any certified, registered or overnight delivery, acceptance shall be deemed to have occurred forty‐eight (48) hours after rejection of such notice.

22.7 Franchisee acknowledges that the evolution of the System requires the development of “X Y Z” Stores and other distribution Points and Branded Products.

22.8 For the purpose of this article, a co‐brand shall be defined as an independent operating system owned by another entity (not Franchisor) that is incorporated as an operational part within the Franchisee’s Store operation. Subject to Franchisor's prior written approval, Franchisee may install approved co‐branding marketing systems to be operated in conjunction with Franchisee’s Store operation. Franchisor shall not be required to approve any co‐branding marketing system unless Franchisor has recognized that co‐branding system as an approved co‐brand for operation within its Store operation, either nationally or regionally. In as much as Franchisee and its employees will be incorporating the co‐brand within its Store operation, all sales of the co‐brand shall be included within the definition of "gross sales" as defined in Article 9 herein and Franchisee shall pay to Franchisor franchise and advertising fees for such sales.

Suggested change: Meaning of this clause is unclear.

You can not work in any other brand in order to evade the royalty and the advertisement expenses.

In the event of the death of Franchisor, the survivor or survivors shall continue to exercise all the rights and be liable for all the conditions imposed by this agreement and the deceased duly appointed by a civil court shall along on giving discharge to the creditors in terms of this agreement be entitled to revoke the contents as state in earlier of this agreement. On an application being made by any person alleging to be

the legal representative or representatives of the deceased may allow to execute the aforesaid agreement an continue the said agreement as per terms and conditions and franchisee and franchisor acknowledge that dispute whatsoever arise time to time as stated above and therefore, the deceased would be bound to aforesaid matter as usual.

In witness whereof, the parties have here unto set and subscribed their hands and seals the day, month and year above written.

Signed, Sealed & delivered at Kolkata in the presence of :‐

 

 

 

Witness:                                                                                                           Signature

1.

                                                                                                               FRANCHISOR

2.

                                                                                                                                                FRANCHISEE