This Direct Franchise Agreement template is designed for use in the German market when establishing a direct franchise relationship between a franchisor and a single-unit franchisee. It incorporates essential elements required under German law, including comprehensive pre-contractual disclosure requirements, competition law compliance, and data protection provisions aligned with GDPR. The document is particularly relevant for businesses expanding through franchising in Germany or German companies establishing domestic franchise systems. It includes detailed provisions for system standards, operational requirements, quality control, and protection of intellectual property rights, while ensuring compliance with German commercial law principles. The agreement should be used when establishing a new franchise relationship or updating existing franchise arrangements to ensure compliance with current German legal requirements.
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1. Parties: Identification of franchisor and franchisee with full legal details
2. Background: Description of the franchise system, business concept, and purpose of the agreement
3. Definitions: Comprehensive definitions of terms used throughout the agreement
4. Grant of Franchise: Scope of franchise rights, territory, and exclusivity provisions
5. Term and Renewal: Duration of the agreement and conditions for renewal
6. Franchise Fees: Initial franchise fee, ongoing royalties, and payment terms
7. Franchisor's Obligations: Support, training, and ongoing assistance obligations
8. Franchisee's Obligations: Operational requirements, compliance with system standards
9. Intellectual Property Rights: Usage of trademarks, patents, copyright, and know-how
10. Quality Control: Standards, inspections, and compliance requirements
11. Marketing and Advertising: Marketing obligations, fees, and approval processes
12. Confidentiality: Protection of confidential information and trade secrets
13. Data Protection: GDPR compliance and data processing obligations
14. Non-Competition: During-term and post-term competition restrictions
15. Transfer and Assignment: Rules for selling or transferring the franchise
16. Termination: Termination grounds and procedures
17. Post-Termination Obligations: Obligations after agreement ends
18. Governing Law and Jurisdiction: Choice of German law and jurisdiction provisions
1. Multi-Unit Development Rights: Include when franchisee has rights to develop multiple units
2. E-Commerce Rights: Include when online sales are permitted or restricted
3. Equipment and Inventory Requirements: Include when specific supplier relationships exist
4. Minimum Performance Requirements: Include when setting specific performance targets
5. Training Fee Structure: Include when training fees are separate from franchise fees
6. Sub-Franchising Rights: Include if sub-franchising is permitted
7. Force Majeure: Include detailed force majeure provisions if desired
8. Alternative Dispute Resolution: Include if mediation/arbitration is preferred
9. Guarantee: Include when personal guarantees are required
1. Schedule 1 - The Manual: Reference to confidential operations manual contents
2. Schedule 2 - Initial Training Program: Details of required initial training
3. Schedule 3 - Products and Services: Approved products and services specification
4. Schedule 4 - Territory Description: Detailed description of granted territory
5. Schedule 5 - Intellectual Property: List of trademarks and other IP rights
6. Schedule 6 - Initial Investment: Breakdown of required initial investment
7. Schedule 7 - Technical Requirements: IT systems and technical specifications
8. Schedule 8 - Design Standards: Store design and corporate identity requirements
9. Appendix A - Pre-Contractual Disclosure: Mandatory disclosure information under German law
10. Appendix B - Data Processing Agreement: GDPR-compliant data processing terms
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