FRANCHISE AGREEMENT
THIS AGREEMENT (the “Agreement”) is made this 05day of January, 2023, by and
between:
( Naveen S ), Pan No: BAZPN9666H, S/o, Palanizhapillai sankar a company
incorporated under the Micro Small and Medium enterprise Act 2006, whose office is at
No,86, Vgp Nagar, Pandiyan street, Mogappair west,Thiruvallur, Tamilnadu, India,
Pincode - 600037 (hereinafter referred to as “the Franchisor”)
AND
( Shayam Kumar M ), Pan No :………… S/o , ………………….. Resident at No, 277,
Kannathasan Street, Annai Sathya nagar, VTC: Ambattur, Ambattur post, Thiruvallu
district, Tamilnadu, India, Pincode - 600053
(hereinafter referred to as “the Franchisee”)
The Franchiser and the Franchisee hereinafter collectively referred to as
the “Parties” and individually as a “Party”.
1. RECITAL
WHEREAS:
1. The Franchisor has developed methods for establishing, operating and
promoting selling Different types of photo framing and Gift products
(“FRAME CUTZZZ’’) using the service mark “FRAME CUTZZZ” and
related trade names and trademarks (“Marks”) and the Franchisor’s
proprietary methods of doing business (the “Licensed Methods”).
2. The Franchisor grants the right to others to develop and operate FRAME
CUTZZZ, under the Marks and pursuant to the Licensed Methods.
3. The Franchisee desires to establish a FRAME CUTZZZ at a location identified
herein or to be later identified, and the Franchisor desires to grant the
Franchisee the right to operate a FRAME CUTZZ at such location under the
terms and conditions which are contained in this Agreement.
2. DEFINITIONS
Commencement date shall be…
Confidential information shallmean all information…
Intellectual Property Rights shall include…
Location shall mean the premises ………………………………….
Method shall mean the methods, techniques and processes developed by the Franchisor;
Trademarks shall mean the names, trademarks and service marks owned by the
Franchisor and include inter alia;
Products shall mean, all Types of Picture Frames, Gift Products, and Craft Gift of the
Franchisor bearing any of the Trademarks;
Term and Renewal the initial term of the agreement shall be for a period One year
from the commencement date; unless sooner terminated in accordance with the provisions
of this agreement
Renewal Term Franchisee should renew this agreement for one year successive terms
Provided that franchisee is not in default of any provision of this agreement.
Turnover shall mean gross revenue of the Franchisee’s store.
Royalty No Royalty to Pay the Franchisor
3. GRANT OF FRANCHISE
In consideration of the onetime professional consultancy fees and the other payments,
which shall be paid by the Franchisee at the time and in the manner set out in this
Agreement and in further consideration of the observance and performance of the
undertakings on the part of the Franchisee, the Franchisor grants to the Franchisee the
right to establish and operate the FRAME CUTZZZ at the Location for the Term.
4. THE FRANCHISEE’S OBLIGATIONS
The Franchisee covenants and agrees with the Franchisor promptly to perform and
observe the following covenants and conditions:
4.1 Commencement
To commence the Project by the Commencement Date.
4.2 Project to be carried out at the specific location only
Not to carry on the Project or any part thereof other than from the Location without the
prior written consent of the Franchisor.
4.3 Business Promotion
4.3.1 Actively to promote the Project and to exercise best endeavours in the conduct of the
Project to promote the mutual business interests of the Franchisor and the Franchisee and
shall cause to be provided at the Location such of the Products as are stipulated by the
Franchisor from time to time.
4.3.2 As part of its endeavours to promote the Project, to organize a Media Conference at
the time of launch and to organize such other promotional activities including but not
limited to media promotions, brochure drops and on-location merchandising display as are
mutually decided by the Parties from time to time.
4.4 Products
4.4.1 Only to sell at the Location and sell through online orders, the Products, which are
specified by the Franchisor and which may be purchased from the Franchisor alone.
4.4.2 In no case will the Franchisee stock or sell any goods other than the Products and
goods which the Franchisor otherwise deems to be unsuitable for sale at the Location and
Online orders.
4.4.3 The Franchisee shall pay for all Products acquired by him from the Franchisor
according to the terms of payment as notified in writing from time to time by the
Franchisor to the Franchisee.
4.4.4 Notwithstanding that risk in any Products supplied by the Franchisor to the
Franchisee, shall pass to the Franchisee upon delivery, full legal and equitable title and
interest in all and any Products supplied to the Franchisee shall remain in the Franchisor
and shall not pass to the Franchisee until the Franchisor shall have received payment in
full of all amounts due and owing from the Franchisee to the Franchisor for the time being
(including any interest accruing and owing to the Franchisor) and from time to time in
respect of all such Products supplied by the Franchisor to the Franchisee at any time.
4.4.5 The Franchisee shall pay the cost of delivery for the Products acquired from the
Franchisor
4.4.6 The Franchisee Should Maiantain the Standard Format of paint,interior,Etc…,
4.5 Non-modification of products
To sell the Products in the same condition as that in which it receives them and not to alter
or remove or tamper with them or any markings or name plates or indications of the
source of origin on them or any packaging supplied by the Franchisor except putting such
notices as are required by the packaging laws of India and will inform the Franchisor of
any such laws and the alterations made for the compliance thereto.
4.6 To be only sold to the end-users
Not during the term of this Agreement or any renewal or extension thereof without the
written approval of the Franchisor, sell the Products other than to end-users.
4.7 Maximum Prices
Not to charge customers prices in excess of the prices specified by the Franchisor in
writing from time to time.
4.8 Maintain Stocks
4.8.1 To commence the Project with a level and type of stock-in-trade of the Products as
are in writing specified by the Franchisor and to maintain at all times during the Term,
stocks of the Products at a level and of a type approved by the Franchisor from time to
time.
4.8.2 To ensure that all stock is maintained in accordance with the Franchisor’s
instructions and recommendations and to the standards prescribed by the
Franchisor in writing from time to time.
4.9 Books of Accounts
4.9.1 To keep such books of account and records and operate such finance and accounting
and stock control systems for the Project made up in accordance with proper and accepted
accounting practices and accurately maintain them up to date at all times.
4.9.2 To provide the Franchisor with true copies of quarterly audited profit and loss
accounts and balance sheets for the Project made up in accordance with proper and
accepted accounting practices, which shall be provided no later than 45 days after the end
of each quarter
4.10 Payments and Schedule
4.10.1 To pay to the Franchisor (or as the Franchisor directs) as per the relevant dates
(time being of the essence):
(i) One time professional fee of One Lakh rupees (1,00,000) towards providing the
professional consultancy for the Project, which shall be payable months prior to the
Commencement Date;
(ii) 0% of the turnover of the FRAME CUTZZZ payable on a quarterly basis;
(iii) The salaries of the staff recruited, trained and employed by the Franchisor in relation
to the Project and any costs incurred on travel, accommodation or any incidental expenses
incurred on recruitment and training of the manpower or in opening and operating the
Project with prior sanction of the Franchisee, which the Franchisor shall bill on the actual.
4.10.2 All payments shall be made by the Franchisee by way of a bankers
cheque/Internet banking/demand draft made payable in favour of the Franchisor.
4.11 No authorized representation
Not to make any representations, statements or warranties about the Project other than
those which are expressly permitted by this Agreement or which the Franchisor may first
authorise in writing.
4.12 Right to inspection
4.12.1 To permit officers, servants and agents of the Franchisor during normal hours of
business to inspect and observe the Project , and all parts of the Location; the stocks of the
Products held by the Franchisee and the manner in which the goods are displayed and sold
by the Franchisee.
4.12.2 To permit the Franchisor and its servants and agents to inspect and copy, books of
account, records, finance and accounting systems at the Location.
4.13 Intellectual Property
Not to be a party to the doing or neglecting to do any act whereby any industrial or
intellectual property including trade secrets and business reputation owned by the
Franchisor and any company related to it and which the Franchisee is authorised to use
(including the goodwill of the business in respect of which this Franchise is granted and
used in connection with the Project) may be prejudicially affected either during the Term
or afterwards.
4.14 Maintain secrecy
4.14.1 To maintain strict secrecy about the Methods of the Franchisor including any
manuals issued by the Franchisor, any technical know-how, trade secrets, product
information, market opportunities, advertising and publicity materials belonging to the
Franchisor, both during the currency of this Agreement and after it is terminated.
4.14.2 To take all steps necessary to ensure that the Franchisee’s nominees, employees,
agents and sub-contractors also observe such requirements of secrecy as stipulated in the
previous clause and shall cause such nominees, employees, agents or sub-contractors to
enter into a secrecy Agreement in a form approved by the Franchisor.
4.14.3 The Franchisee and his nominee, employees, agents or sub-contractors shall not
during the currency of this Agreement and after its termination disclose any Confidential
Information received by any of them from the Franchisor in the course of the Project
unless such disclosure is required by law and will inform the Franchisor of any such
disclosure that they are compelled to make.
4.14.4 The Franchisee and his nominees, employees, agents or sub-contractors shall not
after the termination of this Agreement and thereafter use such Confidential Information
without the prior written consent of the Franchisor.
4.13.5 In order to protect the trade secrets and other Confidential Information as also in
lieu of the know-how received by Franchisee from the Franchisor so as to be able to fulfill
its obligations as part of the Project, Franchisee agrees that during the Term and even
after termination for a period of three years thereof, Franchisee shall not be concerned or
interested either directly or indirectly in any business which is involved in the supply of
goods which are similar to the Products sold at the Location or in providing services
similar to the Services provided as part of the Project.
4.13.6 As part of its obligations to maintain secrecy the Franchisee will not at any time
within ten year’s after the termination of this Agreement:
(i) solicit the customers or former customers of the Project with the intent of taking their
custom;
(ii) employ or offer to employ any person who immediately before such employment or offer
of employment was employed by the Franchisor and not directly or indirectly to induce
such person to leave his or her employment
4.15 Assignment
Not to assign, charge or otherwise deal with the Project in any way without the prior
written consent of the Franchisor.
5. THE FRANCHISER’S OBLIGATIONS
5.1 Permitting the Franchisee to continue the Project
5.1.1 To permit the Franchisee to carry on the business of setting up, operating and
promoting the Burger Legal under the style FRAME CUTZZZ and use the Trademarks or
such other names or styles as may be specified in writing by the Franchisor in relation
thereto.
5.1.2 To permit the Franchisee to operate the business of providing Products and Services
under the style FRAME CUTZZZ and use the Trademarks or such other names or styles as
may be specified or approved in writing by the Franchisor from time to time
5.1.3 To permit the Franchisee to use the Intellectual Property Rights in relation to the
Project.
5.2 Management Advise
5.2.1 To provide the Franchisee, as the Franchisor considers appropriate from time to time,
with management, sales and administrative advice in the conduct of the Project and such
other advice as the Franchisor considers appropriate to promote the mutual business
interests of the Franchisor and the Franchisee.
5.2.2 To furnish the requisite technical expertise and assistance as the Franchisor deems
necessary to the Franchisee
for the completion, management and promotion of the Project.
5.3 Directions on Layout of Location
5.3.1 To provide the Franchisee with directions as to:
(i) the layout and colour scheme arrangements for the Project at the Location;
(ii) the plant and equipment and the fixtures and fittings to be used in the Project,
as well as for the installation of the same.
(iii) Every Franchise shop should be three kilometer away from each location
(iv) Required Shop Square feet of 100to200
5.4 Supply Products and Services
5.4.1 To exercise its best endeavours to fulfil orders for the Products made by the
Franchisee,
provided always that the Franchisor shall be under no obligation to fulfil any order
for the Products made by
the Franchisee, if the Franchisee is at the time in default of his liability to pay his
dues.
5.4.2 To provide to the Franchisee the technical know-how and expertise for the entire
range of “specialized treatments” as developed and formulated by the Franchisor
and to update the Franchisee as regards any improvements thereupon.
5.5 Employ staff and training
5.5.1 To recruit and employ such sufficiently competent staff as the Franchisor deems
necessary
for the efficient conduct and management of the Project
5.5.2 To provide initial training to such of the employees as recruited by the Franchisor
at the level which in the opinion of the Franchisor is adequate to instruct, in
order to efficiently
conduct specialized treatments and sell the Products at the Location.
5.5.3 To provide supplementary training as and when the Franchisor deems necessary
during the Term as well as further training in new techniques or concepts
developed by the Franchisor
6. IP RIGHT’S OWNERSHIP
6.1 The Franchisee acknowledges and recognises the exclusive right of the Franchisor
to the
Intellectual Property rights including without limitation Trademarks as well as
the insignia,
logo-grams, designs and other Intellectual Property Rights associated with the
Franchisor.
6.2 The Franchisee will observe the following requirements in the use of the
Trademarks:
6.2.1 Use them in a proper trademark sense in the manner as prescribed by the
Franchisor from time to time;
6.2.2 In the case of such of the Trademarks as are registered indicate that such marks
are registered by use of
the symbol ‘®’ and that the Franchisee is a licensee of such marks;
6.2.3 Not encumber, sub-license, assign, transfer or otherwise deal with his rights to
the Trademarks;
6.2.4 Under no circumstances on any occasion will the Franchisee register any
business, trade or corporate name or
style associated with the Franchisor.
6.3 The Franchisee shall forthwith notify the Franchisor of any infringements of such
Intellectual Property
Rights of which the Franchisor becomes aware provided however that the
prosecution of any claim with respect
to any Intellectual Property Rights shall be the sole responsibility and undertaken at
the absolute discretion of the Franchisor.
7. INDEMINITY BY THE FRANCHISEE
The Franchisee covenants and agrees with the Franchisor that the Franchisee shall
assume sole and entire responsibility for and indemnify and save harmless the Franchisor
from any and all claims, liabilities, losses, expenses, responsibility and damages by reason
of any claim, proceedings action, liability or injury arising out of the Franchisee’s conduct
of the Project or as a result of the Franchisee’s relations with his customers and other third
parties or because of any breach of this Agreement by the Franchisee.
8. FURTHER TERM
Provided that there shall not be any prior or existing breaches or non-observances of any of
the covenants, conditions, Agreements, and provisos on the part of the Franchisee
contained in this Agreement, the Franchisor will upon the written request of the
Franchisee given not less than 3 months prior to the expiration of the term of the franchise
hereby granted, grant a further term of the franchise for…… years and the Franchisee will
accept such further term upon the Franchisor’s then prevailing terms and conditions.
9. TERMINATION
This Agreement shall terminate:
(A) On the expiry of the Term;
(B) On the occurrence of any of the following events which are fundamental breaches of
this Agreement terminating it forthwith:
(i) in the event of a breach by the Franchisee of any provisions of this Agreement and
subsequent failure to remedy the breach within thirty days of having been notified by the
Franchisor;
(ii) failure to make the payments on any of the relevant payment dates as specified in the
Agreement (time being of the essence);
(iii) any assignment or disposal of the Project or the Location by the Franchisee;
(iv) any challenge by the Franchisee to the validity of any part of the Intellectual Property
Rights; provided that the Franchisor may waive any breach of this Agreement by the
Franchisee.
(C) If the Franchisee goes into either compulsory or voluntary liquidation (except for the
purpose of reconstruction or amalgamation) or if a receiver is appointed in respect of the
whole or any part of its assets or if the Franchisee makes assignment for the benefit of or
composition with its creditors generally or threatens to do any of these things or any
judgment is made against the Franchisee or any similar occurrence in any jurisdiction
affects the Franchisee.
(D) If the Franchisee engages in any conduct prejudicial to the Project or the marketing of
the Products or Services generally.
(E) If any material change occurs in the management or control of the Franchisee
particularly any change of directors or shareholders.
10. EFFECTS OF TERMINATION
10.1 Upon termination of this Agreement for whatever reason the Franchisee shall:
(i) Immediately cease to operate and conduct the FRAME CUTZZZ , provide Services and
sell Products, however it shall not be relieved of the obligation to pay any monies due to
the Franchisor pursuant to this Agreement;
(ii) Cease to exploit any Intellectual Property Rights owned by the Franchisor or any
company related to it and licensed to the Franchisee in respect of the Project;
(iii) Forthwith cease to use any of the Trademarks and to desist from using any trademark
confusingly or deceptively similar to the Trademarks or the style;
(iv) Deliver to the Franchisor any documentation including without limitation manuals,
catalogues, instructions, notes, publicity promotional and advertising material, samples,
letterheads, business cards relating to the Project;
(v) The Franchisee will furnish to the Franchisor an inventory of the unsold stock held by
it and transfer to the manufacturer or any person, firm or corporation designated by the
manufacturer: (vi) The Franchisee shall if required by the Franchisor sell and deliver to
the Franchisor:
(a) the fixtures and fittings and plant and equipment owned and used by the franchisee in
the Project as may be selected by the Franchisor;
(b) the Franchisee’s unsold stock of the Products which are in good saleable condition as
may be selected by the Franchisor.
(vii) The purchase price for such fixtures and fittings and plant and equipment selected by
the Franchisor shall be as agreed upon by the Franchisee and the Franchisor and failing
Agreement as fixed by a reputed valuer of such items appointed by the Franchisor
(viii) The sale to the Franchisor of the Franchisee’s unsold stock of the Products selected by
the Franchisor shall be at the same price as given by the Franchisor to the Franchisee
(ix) Any freight charges incurred by the Franchisor in the acquisition by it of the
Franchisee’s fixtures and fittings and plant and equipment and unsold stock of the
products as aforesaid shall be paid by the Franchisee.
(x) The Franchisee shall permit and authorise the Franchisor to have reasonable access to
the premises at which the fixtures and fittings, plant and equipment and unsold stocks are
then located so as to enable the Franchisor to inspect and to take possession of any such
items if purchased.
11. DAMAGES
Most specifically the FRANCHISEE acknowledges that:
(i) the FRANCHISOR has expended considerable time, investment and efforts in:
(a) locating an appropriate FRANCHISEE at an appropriate location;
(b) entering into discussions and negotiating with the FRANCHISEE;
(c) training the FRANCHISEE’s personnel;
(d) helping the FRANCHISEE build up considerable goodwill in its Centre so as to
increase business.
(ii) the premature termination of this Franchise Agreement would result in huge losses to
the FRANCHISOR which would then have to:
(a) locate another appropriate FRANCHISEE;
(b) invest in the FRANCHISEE Center by training personnel etc.;
(c) build-up goodwill in the new Centre so that the business of the new FRANCHISEE
matches up to that of the earlier FRANCHISEE.
11. ENTIRE AGREEMENT
This Agreement sets forth the entire Agreement and understanding between the parties as
to the subject-matter of this Agreement and merges all prior discussions between them
and neither of the parties shall be bound by any conditions, definitions, warranties or
representations with respect to the subjectmatter of this Agreement other than as
expressly provided in this Agreement as duly set forth or subsequent to the date in writing
and signed by a proper and duly authorized representative of the party to be bound
thereby.
12. FORCE MAJEURE
The Franchisor shall not be liable to the Franchisee for any loss by the Franchisee caused
by the failure of the Franchisor to observe the terms and conditions of this Agreement and
on his part to be observed and performed where such failure is occasioned by any cause
beyond the Franchisor’s reasonable control including the failure of the Franchisor to
supply or delay in supplying any goods to be supplied by the Franchisor to the Franchisee
whether on account of inter alia war, insurrection, fire, flood, earthquake, strikes,
lock-outs, the unavailability of raw materials or similar cause.
14. WAIVER
Any waiver by the Franchisor of a breach of this Agreement or any other subsequent
Agreement to which it may be a party in consequence of this Agreement shall not be
deemed to be a waiver of any subsequent breach.
15. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect, and if any provision is inapplicable to any person or
circumstances, it shall nevertheless remain applicable to all other persons and
circumstances.
16. JURISDICTION
16.1 This Agreement shall be governed by Indian law in every particular including
formation and interpretation and shall be deemed to have been made in India.
16.2 Any proceedings arising out of or in connection with this Agreement shall be brought
only before the court of competent jurisdictions in ……………….
17. NOTICES
17.1 Any notice, request or other communication required to be given under this
Agreement shall be served personally or mailed to the other party by registered post,
addressed to the parties at their respective addresses set out at the beginning, or at any
other address that each party shall provide to the other in writing.
17.2 Any notice served personally shall be considered given at the time of service. Any
notice given by registered post shall be deemed to have been received within five days after
the date of posting as shown on the post office receipt.
IN WITNESS WHEREOF, the Parties have executed this Agreement, as of the day and
year first written above.
On behalf of FRAME CUTZZZ
17.3 Prohibit any political activities on shop premises
SIGNED AND DELIVERED BY:
(Name and designation)
SIGNED AND DELIVERED BY:
(Name and designation)
