The Franchise Deed serves as the foundational document for establishing a franchise relationship within the Indian legal framework. This document is essential when a business owner (franchisor) wishes to expand their business by allowing others (franchisees) to operate under their brand name and business system. The deed comprehensively covers all aspects of the franchise relationship, including brand usage rights, operational requirements, financial terms, and quality control measures. It ensures compliance with Indian laws and regulations while protecting both parties' interests. A well-drafted Franchise Deed is crucial for businesses expanding through the franchise model in India, as it provides legal protection and clear operational guidelines while adhering to local commercial laws and industry-specific regulations.
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1. Parties: Details of the Franchisor and Franchisee, including complete legal names, addresses, and registration details
2. Background: Introduction to the franchise business, brand history, and purpose of the agreement
3. Definitions: Comprehensive list of defined terms used throughout the agreement
4. Grant of Franchise: Scope of franchise rights, territory, and exclusivity terms
5. Term and Renewal: Duration of the franchise agreement and conditions for renewal
6. Franchise Fees and Payments: Initial franchise fee, royalties, advertising contributions, and payment terms
7. Franchisor's Obligations: Support, training, marketing, and other services provided by the franchisor
8. Franchisee's Obligations: Operational requirements, quality standards, and compliance obligations
9. Intellectual Property Rights: Usage of trademarks, patents, copyrights, and trade secrets
10. Training and Support: Initial and ongoing training requirements and support services
11. Quality Control: Standards, inspections, and compliance requirements
12. Marketing and Advertising: Marketing obligations, advertising fund contributions, and local marketing requirements
13. Records and Reporting: Financial reporting requirements, audit rights, and record-keeping obligations
14. Confidentiality: Protection of confidential information and trade secrets
15. Non-Competition: Restrictions during and after the term of the agreement
16. Transfer and Assignment: Conditions for transfer of franchise rights
17. Termination: Grounds for termination and consequences
18. Post-Termination Obligations: Obligations and restrictions after agreement ends
19. Dispute Resolution: Process for resolving disputes, including jurisdiction and arbitration
20. Governing Law: Applicable law and jurisdiction
1. Sub-Franchising Rights: Include when franchisee is granted rights to sub-franchise
2. E-commerce Rights: Include for digital commerce operations and online sales regulations
3. International Operations: Include for cross-border franchise operations
4. Development Schedule: Include for multi-unit franchise agreements
5. Force Majeure: Include specific provisions for unforeseen circumstances
6. Insurance Requirements: Include detailed insurance obligations if specific coverage is required
7. Environmental Compliance: Include for businesses with environmental impact
8. Property and Equipment: Include for franchise operations requiring specific premises or equipment
9. Personal Guarantees: Include when personal guarantees from franchisee's directors/partners are required
1. Schedule 1 - Brand Standards Manual: Detailed operational procedures and brand standards
2. Schedule 2 - Intellectual Property: List of trademarks, copyrights, and other IP being licensed
3. Schedule 3 - Initial Setup Requirements: Detailed requirements for franchise location setup
4. Schedule 4 - Training Program: Details of initial and ongoing training requirements
5. Schedule 5 - Territory Map: Detailed description and/or map of granted territory
6. Schedule 6 - Fee Structure: Detailed breakdown of all fees and payment terms
7. Schedule 7 - Approved Suppliers: List of approved suppliers and products
8. Schedule 8 - Marketing Guidelines: Detailed marketing and advertising requirements
9. Appendix A - Financial Reporting Forms: Standard forms for financial reporting
10. Appendix B - Quality Control Checklist: Detailed quality control standards and inspection criteria
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