The Franchise Lease Agreement is a specialized legal instrument used when establishing a franchise operation that requires specific premises for its business activities in India. This hybrid agreement is particularly crucial when the franchisor either owns the property or wants to maintain control over the lease arrangements for their franchised locations. The document combines elements of a standard franchise agreement (covering brand usage, operational standards, and franchise fees) with comprehensive lease provisions (addressing rent, maintenance, and property usage). It ensures compliance with Indian franchise practices and property laws while protecting the interests of all parties involved. The agreement is especially relevant for businesses expanding through the franchise model where location and standardized premises are critical to brand consistency and success.
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1. Parties: Identification of the franchisor, franchisee, and property owner (if different from franchisor)
2. Background: Context of the agreement, brief description of the franchise business and property
3. Definitions: Definitions of key terms used throughout the agreement
4. Grant of Franchise: Terms of franchise rights, territory, and exclusivity
5. Grant of Lease: Specific terms of the lease, including premises description and permitted use
6. Term and Renewal: Duration of both franchise and lease agreements, renewal conditions
7. Fees and Payments: Franchise fees, royalties, rent, security deposit, and other financial obligations
8. Franchisor's Obligations: Support, training, and other services provided by the franchisor
9. Franchisee's Obligations: Operating standards, maintenance requirements, reporting obligations
10. Property Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements
11. Intellectual Property Rights: Use of trademarks, trade secrets, and other IP
12. Insurance and Indemnification: Required insurance coverage and indemnification obligations
13. Default and Termination: Events of default, remedies, and termination procedures
14. Post-Termination Obligations: Obligations of parties after agreement termination
15. Governing Law and Dispute Resolution: Applicable law and dispute resolution mechanisms
1. Environmental Compliance: Required when premises involve specific environmental considerations or regulations
2. Assignment and Subletting: Include when transfer rights need to be specifically addressed
3. Force Majeure: Detailed force majeure provisions beyond standard clauses
4. Common Area Maintenance: Required when premises are part of a larger commercial complex
5. Expansion Rights: Include when franchisee may have rights to additional territories or spaces
6. Property Improvements: Detailed section when significant renovations or improvements are planned
7. Co-Branding Rights: Include when multiple brands may operate in the same premises
8. Digital Rights: Required when online operations are significant part of the franchise
1. Schedule A - Property Details: Detailed description of premises, including floor plans and measurements
2. Schedule B - Franchise System Standards: Operational procedures and brand standards
3. Schedule C - Financial Terms: Detailed breakdown of all financial obligations and payment terms
4. Schedule D - Approved Suppliers: List of approved suppliers and procurement procedures
5. Schedule E - Training Requirements: Details of initial and ongoing training programs
6. Schedule F - Equipment and Fixtures: List of required equipment, fixtures, and maintenance standards
7. Schedule G - Insurance Requirements: Detailed insurance coverage requirements
8. Appendix 1 - Brand Manual: Detailed brand guidelines and operational procedures
9. Appendix 2 - Form of Bank Guarantee: Standard format for required bank guarantees
10. Appendix 3 - Handover Protocol: Procedures for premises handover and return
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