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The Franchise Deposit Agreement is a critical document used in Indian franchise relationships to formalize and secure the financial commitment between franchisors and franchisees. This agreement is typically executed during the initial stages of establishing a franchise relationship or when securing franchise territory rights. It serves to protect both parties' interests by clearly defining the deposit amount, its purpose, and the conditions under which it may be refunded or forfeited. The document must comply with Indian contract law, banking regulations, and franchise practices, making it essential for businesses expanding through the franchise model in India. The agreement should be customized based on the specific franchise arrangement, deposit amount, and any special conditions agreed upon by the parties.

1. Parties: Identification and details of the franchisor and franchisee

2. Background: Context of the franchise relationship and purpose of the deposit agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Deposit Amount: Specification of the deposit amount, currency, and payment terms

5. Purpose of Deposit: Clear statement of what the deposit is for and how it relates to the franchise relationship

6. Payment Terms: Details of how and when the deposit must be paid

7. Security and Holding of Deposit: Information about how the deposit will be held and secured

8. Conditions for Refund: Circumstances under which the deposit will be refunded

9. Conditions for Forfeiture: Circumstances under which the deposit may be forfeited

10. Interest on Deposit: Whether interest will accrue on the deposit and how it will be handled

11. Representations and Warranties: Standard representations and warranties from both parties

12. Notices: How formal communications between parties should be made

13. Governing Law: Specification of Indian law as governing law and jurisdiction

14. Dispute Resolution: Procedures for resolving disputes between parties

15. General Provisions: Standard boilerplate clauses including severability, entire agreement, etc.