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A franchise agreement India is a contract where a business person consents to grant the enterprise name or company system to an individual or an entity (the franchisee). The franchise agreement format will characterize the foundation of the terms between both the consenting groups, define the remuneration for the franchisee (payment in the way of royalties, for the usage of the business trademark, etc), mention conditions upon the usage of the brand name, specify the extent of the agreement, mention terms concerning disciplinary provisions (varying from financial penalty and allowances to withdrawal of the business franchise and the contract) and so on.
Certain benefits of a franchise agreement India are mentioned below-
A franchise agreement permits the businessman (who is franchising his company) to define guidelines for the maintenance of quality related to different facets of the trade before onboarding the client and binding them in a franchise contract.
With a franchise agreement format in place, the franchisor can set guidelines for how the franchisee adopts the business and branding. Also, the penalties for mismanagement or violation of the business branding are defined in the agreement to protect the brand name at all times.
The most essential elements of a franchise agreement sample are mentioned below-
The details of the franchisor and franchisee and their relationship are outlined at the very beginning of the franchise agreement draft.
It is the decided tenure of the franchisor-franchisee relationship. The duration can be extended if both parties wish to continue the relationship further.
Matters related to franchisee fees, royalties, deposits, etc, along with their due dates and modes of payment are discussed in a separate segment. These considerations will be as per discussions between the franchisor and the franchisee before the signing of the agreement.
It is the responsibility of the franchisee to find out a suitable location for its business unit and obtain the approval of the franchisor, before signing the agreement. The detailed requirements of the location and the specification of the business unit must be mentioned in this section.
This section will include detailed information about the support to be extended by the franchisor and the responsibilities of the franchisee. Some of the areas covered here will include-
This section of the franchise agreement mentions the responsibility of the franchisor to spend in branding and promotional activities to help the business. The responsibility of the franchisee towards brand building activities is also mentioned in clear terms.
This section mentions the use of intellectual property (patents, trademarks, manuals, etc) of the franchisor by the franchisee. It also has clauses to prohibit the use of such assets by the franchisee after the termination of the franchise agreement.
It is the responsibility of the franchisor to provide the required support, training, and supervision to the franchisee. Details regarding this are mentioned clearly in this section.
This clause includes detailed provisions related to the termination of the franchise agreement if either party fails to perform as per the terms mentioned in the agreement. It will also mention the fines/penalties applicable and the liabilities of the parties involved after the termination of the agreement.
Upon contact, your request to prepare a franchise agreement will be received and our representative will be in touch with you to take your request forward. If we need more information from your end, we will call you as and when required. After we receive all your details, our in-house lawyers and legal experts, will create the franchise agreement draft and send it across for your view within 2- 4 business days.
Your original price includes two rounds of iterations. Therefore, if you need any changes done to the franchise agreement sample, our lawyers will do the needful and send it across to you for your approval once again.
What is a franchisee?
A franchisor is any business, which has a parent company that provides a basic business model and brand name. The parent company loans these principles and brand image to a third party, known as a franchisee. While the franchise is owned, operated, and managed by individuals, the entire process is overseen by the larger parent company, which is usually an MNC.
Does India have specific laws for such franchisee businesses?
No. India does not have separate laws that deal explicitly with franchise business models. However, we do have laws regarding how they must function. India does not have any particular law that deals specifically with the franchise agreement, its termination, the setting of clauses, and non-disclosure. But several enactments help control and regulate the functioning of franchise businesses in India.
What are the different laws and acts that help with Government franchisee business in India?
The different laws which govern various aspects of franchising in India are as follows:
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18-May-2020: Bharti Airtel, the telecom giant, has released its quarterly report today for its Home Services segment. The company has said that it has achieved a YoY (Year-on-Year) growth of 3% as of March 2020. The company has thanked its franchise players for expanding its presence and contributing to its growth.