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